subdomains on an intranet (why does iis seem to require FQDN?)

I have inherited administrative duties at my company. and I noticed that DNS is a mess.

so as im cleaning up, id like to set up subdomains for the varius utilities of internal web pages.
however I cannot get IIS to bind properly to a subdomain unless I use the FQDN. can anyone help me with this?

the situation looks a bit like this:
currently -- Host (A), dev-frontline,
                    Host (A), qac-frontline,
                    Host (A), frontline,
Id like to do something like this:
                    CName, dev.frontline,
                    CName, qac.frontline,
                    CName, frontline,

when I set this up in DNS
nslookup to dev.frontline resolves to
ping to dev.frontline resolves fine.

so I logon to the webserver and bind the url to the site I want in IIS.
and I get a 401 on dev.frontline

so I think ... will the fqdn work?
and after changing the binding, yes fqdn works fine.

but if im going to do this in production, I need have dev.frontline working without the me.local part.

anyone know what im missing?
thanks in advance!
Darrington BevinsCEOAsked:
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Darrington BevinsCEOAuthor Commented:
nslookup works fine

ping to dev.frontline fails
ping to fqdn works fine
ping to ip works fine
ping to dev-web01 works fine

the connection specific dns suffix is set to me.local

its very strange that nslookup works, but ping does not.
How have you created the CNAME "dev.frontline"?

I.e. have you created the root zone "frontline" and created a CNAME "dev" in the "frontline" zone? Or have you just created a CNAME "dev.frontline" in your "me.local" parent zone?

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Darrington BevinsCEOAuthor Commented:
Well I rebuilt the entire environment, but I'm awarding the solution to the only person to post.
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Microsoft IIS Web Server

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