Credit to QkiZ, the dnscrypt-proxy service works EVERY TIME and ignores the 
(completely broken) DNS resolution of dnsmasq and resolvconf. Even with the 
newest version of network-manager (1.2.6) on 16.04 LTS and all its dependencies:
network-manager
libnm-glib-vpn1
libnm-glib4
libnm0
libnm-util2

No more DNS resolution issues!
To apply this workaround (which actually also offers some security benefits 
against DNS leakage), use:
sudo apt install dnscrypt-proxy
In the network manager, select "Edit Connections", select the primary (non-VPN) 
network you use, click on the "IPv4 Settings" tab, change the "Method" tab to 
"Automatic (DHCP) addresses only", then add 127.0.0.2 to the "DNS servers:" 
box. Save your changes, then restart the connection by disabling and enabling 
networking. Now go to https://www.opendns.com/welcome/ and you should see a 
nice check mark.
Now, your network connection and VPN should work (meaning DNS resolution won't 
break on you) every single time you wake up from suspend or use
sudo service network-manager restart
Good stuff!

-- 
You received this bug notification because you are a member of Ubuntu
Touch seeded packages, which is subscribed to dnsmasq in Ubuntu.
https://bugs.launchpad.net/bugs/1636395

Title:
  dnsmasq not working with OpenVPN

Status in dnsmasq package in Ubuntu:
  Confirmed
Status in openvpn-systemd-resolved package in Ubuntu:
  Confirmed

Bug description:
  I'm using OpenVPN configured with Network Manager. My VPN have a DNS
  server configured by OpenVPN and config pushed by it while connecting.
  This server is not registered by dnsmasq so domain names are not
  resolved but pinging by IP address works. When I test name resolving
  by pointing to DNS server (172.16.1.1) from VPN provider it's works.
  For example:

  $ host google.com 172.16.1.1
  Using domain server:
  Name: 172.16.1.1
  Address: 172.16.1.1#53
  Aliases: 

  google.com has address 172.217.0.174
  google.com has IPv6 address 2607:f8b0:400b:807::200e
  google.com mail is handled by 30 alt2.aspmx.l.google.com.
  google.com mail is handled by 20 alt1.aspmx.l.google.com.
  google.com mail is handled by 40 alt3.aspmx.l.google.com.
  google.com mail is handled by 10 aspmx.l.google.com.
  google.com mail is handled by 50 alt4.aspmx.l.google.com.

  But if I test without pointing DNS server is not working:

  $ host google.com
  ;; connection timed out; no servers could be reached

  My /etc/resolv.conf:
  # Dynamic resolv.conf(5) file for glibc resolver(3) generated by resolvconf(8)
  #     DO NOT EDIT THIS FILE BY HAND -- YOUR CHANGES WILL BE OVERWRITTEN
  nameserver 127.0.1.1

  To repair this bug I have to kill dnsmasq and it's automatically
  reloaded.

To manage notifications about this bug go to:
https://bugs.launchpad.net/ubuntu/+source/dnsmasq/+bug/1636395/+subscriptions

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