Have hit this bug as well.

Sep 13 14:16:30 kristopher-LT21 NetworkManager[503]: <warn> dnsmasq
exited with error: Network access problem (address in use; permissions;
etc) (2)

Is because Network Manager does not kill dnsmasq when it drops the
connection. There is no indication in the logs though why NM decides to
keep dropping the connection for no reason.

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https://bugs.launchpad.net/bugs/849297

Title:
  ICS - Internet Connection Sharing

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