OK. I found the upstream bug on this. Please note that -- per upstream
-- this is still open. The issue stems from a *non-working* DNS at the
time NTP is triggered (most probably on boot).

This is why, when you are up & running, you do not see this error.
Please see the upstream bug for details.

So. Right now you have the following options: 
* move to IP addresses instead of FQSN
* have a working DNS at the time NTP is triggered

** Bug watch added: psp2.ntp.org/bugs/ #975
   https://psp2.ntp.org/bugs/show_bug.cgi?id=975

** Also affects: ntp via
   https://psp2.ntp.org/bugs/show_bug.cgi?id=975
   Importance: Unknown
       Status: Unknown

** Changed in: ntp (Ubuntu)
       Status: Incomplete => Triaged

-- 
ntp host name not found error
https://bugs.launchpad.net/bugs/548885
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