While I have not tried the above hosts file 'fix', I am having what looks like the same issue. My workstation (Ubuntu 8.10 x86_64) has no issues reaching my local mail servers via mutt or Evolution.
Might this be an issue of handling cnames?
$ host mail.XXXXX.net
mail.XXXXX.net is an alias for mda1.XXXXX.net.
mda1.XXXXX.net has address aaa.bbb.ccc.ddd |