Many thanks Chris.

I just felt triggered by this closing because I remember how much pain
this bug caused me while working in a data center back in the days. :)

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https://bugs.launchpad.net/bugs/1006898

Title:
  [SRU] dnsmasq fails at leasing issues when using vlan mode

Status in dnsmasq package in Ubuntu:
  Fix Released
Status in dnsmasq source package in Precise:
  Won't Fix

Bug description:
  ** Issue **

  There is an issue with the way nova uses dnsmasq in VLAN mode. It starts
  up a single copy of dnsmasq for each vlan on the network host (or on
  every host in multi_host mode). The problem is in the way that dnsmasq
  binds to an ip address and port[2]. Both copies can respond to broadcast
  packet, but unicast packets can only be answered by one of the copies.

  In nova this means that guests from only one project will get responses
  to their unicast dhcp renew requests. Unicast projects from guests in
  other projects get ignored. What happens next is different depending on
  the guest os. Linux generally will send a broadcast packet out after
  the unicast fails, and so the only effect is a small (tens of ms) hiccup
  while interface is reconfigured. It can be much worse than that,
  however. I have seen cases where Windows just gives up and ends up with
  a non-configured interface.

  This bug was first noticed by some users of openstack who rolled their
  own fix. Basically, on linux, if you set the SO_BINDTODEVICE socket
  option, it will allow different daemons to share the port and respond to
  unicast packets, as long as they listen on different interfaces. I
  managed to communicate with Simon Kelley, the maintainer of dnsmasq and
  he has integrated a fix[3] for the issue in the current version[1] of
  dnsmaq.

  [3]
  
http://thekelleys.org.uk/gitweb/?p=dnsmasq.git;a=commitdiff;h=9380ba70d67db6b69f817d8e318de5ba1e990b12

  ** Development Fix **

  This has been fixed in quantal with the newer version of dnmasq.

  ** Stable Fix **

  I have backported the patch which fixes this issue, I have attached
  the debdiff and the buildlog.

  ** Test Case **

  1. Install openstack with vlan mode.
  2. Watch instances loose their IP addresses.

  ** Regression Potential **

  Minimal, most installations dont use this type of networking.

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