I, too, confirm this bug.  It worked fine in Gutsy; and the network
manager edits the /etc/hosts file so that the first two lines look like:

172.0.0.1 localhost [hostname].[domain]
172.0.1.1 [hostname].[domain]

The second ".[domain]" should not be added; this is the part the messes
with sudo.

-- 
[hardy] Manually Configuring Network Causes Massive, Unreversable, Failure
https://bugs.launchpad.net/bugs/185209
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