This bug was fixed in the package network-manager - 0.9.6.0-0ubuntu7

---------------
network-manager (0.9.6.0-0ubuntu7) quantal; urgency=low

  * debian/network-manager.dnsmasq: Drop "except-interface=lo", since we don't
    listen on 127.0.0.1 directly anymore and keeping that directive has the
    tendency to break system-wide instances of dnsmasq which would write out
    127.0.0.1 to /etc/resolv.conf but never listen on that IP. (LP: #1044388)
 -- Mathieu Trudel-Lapierre <[email protected]>   Fri, 14 Sep 2012 17:07:19 
-0400

** Changed in: network-manager (Ubuntu)
       Status: In Progress => Fix Released

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https://bugs.launchpad.net/bugs/1044388

Title:
  network-manager should not turn on dnsmasq's "except-interface=lo"
  option

Status in “network-manager” package in Ubuntu:
  Fix Released

Bug description:
  As of n-m 0.9.6.0-0ubuntu4 NM listens on 127.0.1.1 rather than
  127.0.0.1.  So there is no longer any need to prevent standalone
  dnsmasq from binding lo's address, 127.0.0.1.  So the line

      except-interface=lo

  in /etc/dnsmasq.d/network-manager which was added in
  0.9.6.0~git201207161259.00297f4-0ubuntu1 should be removed.  (The line
  "bind-interfaces" in that file is still needed.)

  Previous discussion of these issues was in bug #959037.

  I append the relevant changelog entries.

  network-manager (0.9.6.0-0ubuntu4) quantal; urgency=low

    * debian/patches/dns-dnsmasq-interface-and-dbus-path.patch: set the address
      dnsmasq (and bind) plugins should listen on for DNS resolution to 
127.0.1.1,
      as opposed to 127.0.0.1 to avoid conflicts with other instances that might
      need to run on the system with that address.
  [...]

  network-manager (0.9.6.0~git201207161259.00297f4-0ubuntu1) quantal; 
urgency=low
  [...]
    * debian/network-manager.dnsmasq, debian/rules:
      install a config file to /etc/dnsmasq.d to avoid system-wide instances of
      dnsmasq to bind to 0.0.0.0 and the loopback interface, so that the NM-
      spawned instance can claim an IP on lo and provide local resolution.
      (LP: #959037)

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