hello. Actually, on the server side, where you get the "host is down" message, that is a system error from the network stack itself. I've seen it when the arp cache times out and can't be refreshed in a timely manner. What happens if you run an extended ping session between the dom0 and domu hosts, starting the ping from the dom0 side? And, by extended session, I mean running a ping session for an hour or two, capturing all the output in a log file. Do you get any packet loss during that interval? If so, what errors does ping show when the loss is occurring?
-thanks -Brian