This has been known for quite some time. Avahi is used service discovery like finding printers. It's similar to Mac OS X's Bonjour service. Unfortunately, when you have a .local domain (which I do) it seems to mess with things. For example, I cannot refer to anything in the .local TLD by name. So to fix it I've been just stopping the service.
sudo /etc/init.d/avahi-daemon stop
This works but isn't a permanent solution. To fully remove Avahi from startup use the update-rc.d command.
