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I ran into an issue where some DNS requests were resulting in:

*** dnsserver.local can’t find google.com: Server failed

The event log on the DNS server showed an Information event which seemed to coincide with every failed request. That event was:

Event ID 5501: The DNS server encountered a bad packet from xx.xx.xx.xx.  Packet processing leads beyond packet length. The event data contains the DNS packet.

For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.

The DNS server was Windows 2008 R2 Hyper-V virtual machine running on a Windows 2008 R2 Hyper-V host. The first thing I tried is the same old solution for most networking issues I have run into on a Hyper-V guest.

Sure enough, the old  Disable Large Send Offload trick fixed it right up. DNS Requests were consistently coming back with accurate IP addresses.

1. Get properties on your guest VM network adapter. That’s, right, the Microsoft Virtual Machine Bus Network Adapter.
2. Select the Advanced tab from the Properties dialog.
3. Select Large Send offload Version 2 (IPv4)
4. Set the Value to Disabled.
5. Select Large Send offload Version 2 (IPv6)
6. Set the Value to Disabled.
7. Click OK to dismiss the dialog.

In my case, after doing so, I had some errors in the DNS event log. DNS Service didn’t seem to recover until I restarted the DNS service. After restarting all was good.