This is my first entry on sourceforge and I'm not familiar with etiquette, so please forgive newbie mistakes.
A bugfix listed here https://sourceforge.net/tracker/index.php?func=detail&aid=2806823&group_id=40604&atid=428516 changes calls to the DNSMASQ daemon to use the `--local=$DOMAINNAME` switch that causes the service not to pass DNS queries to upstream servers for the local domain.
While this is a good default, some of us have our DNS configured properly with external servers and this option causes that external DNS to stop working within our network.
I've confirmed that removing that option from /etc/rc.d/rc.dnsmasq OR commenting out `except-interface=wan-1' in /var/ipcop/dhcp/dnsmasq.conf both result in IPCop using upstream DNS for the local domain.
An appropriate place to put such an option might be in /var/ipcop/dhcp/dnsmasq.local (since it is not supposed to be overwritten by updates) and when rc.dnsmasq loads the daemon it could parse that file to look for a 'always_use_upstream_dns=1' option.
I don't know how these sort of things get worked out, but I could supply a patch file for rc.dnsmasq if that is what is expected.