This is still an issue for me in 14.04.2 LTS

Package Versions
network-manager  0.9.8.8-0ubuntu7.1
network-manager-gnome  0.9.8.8-0ubuntu4.3
network-manager-openvpn  0.9.8.2-1ubuntu4
network-manager-openvpn-gnome  0.9.8.2-1ubuntu4

Disabling dns=dnsmasq does fix it

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https://bugs.launchpad.net/bugs/1169437

Title:
  network-manager does not configure local resolver or dnsmasq to use
  the nameserver addresses received from the VPN server

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