Comment 28 for bug 1163147

Thomas, thanks for the advice: I took the fix from 3.2 and 4 and the advice to rename my update.d script to /etc/resolvconf/update.d/dnsmasq-libvirt

What works:
On the host, Internet host name lookups
On the host, LAN host name lookups
In KVM guests, Internet host name lookups
In KVM guests, other KVM guest name lookups

What doesn't work:
On the host, KVM guest name lookups
In KVM guests, LAN name lookups

Now that your fix from 3.2 is in place, I can see that the situation is rather more complicated than I expected: Once I fixed the dnsmasq command line, it now starts, and I have two dnsmasq servers for virtual environments, one for LXC and one for libvirt. I modified the command line arguments for the LXC-aimed dnsmasq. The libvirt dnsmasq uses a configuration file, /var/lib/libvirt/dnsmasq/default.conf

##WARNING: THIS IS AN AUTO-GENERATED FILE. CHANGES TO IT ARE LIKELY TO BE
##OVERWRITTEN AND LOST. Changes to this configuration should be made using:
## virsh net-edit default
## or other application using the libvirt API.
##
## dnsmasq conf file created by libvirt
strict-order
domain-needed
user=libvirt-dnsmasq
local=//
pid-file=/var/run/libvirt/network/default.pid
except-interface=lo
bind-dynamic
interface=virbr0
dhcp-range=192.168.122.2,192.168.122.254
dhcp-no-override
dhcp-leasefile=/var/lib/libvirt/dnsmasq/default.leases
dhcp-lease-max=253
dhcp-hostsfile=/var/lib/libvirt/dnsmasq/default.hostsfile
addn-hosts=/var/lib/libvirt/dnsmasq/default.addnhosts

I haven't yet tried the simplification of getting rid of 127.0.3.1. I have a feeling that I need to further configure the libvirt-owned dnsmasq instance before getting too fancy. (For the same reason, I've also held off the managed upstart for the lxc-owned dnsmasq.)

I'm now too sleepy to see the modifications that might be needed. I thought I should document all this progress before I sleep, though.

Thanks Thomas and Serge!