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, 10.10.10.101
                    Host (A), qac-frontline, 10.10.10.111
                    Host (A), frontline, 10.10.10.121
Id like to do something like this:
                    CName, dev.frontline, dev-web01.me.local
                    CName, qac.frontline, qac-web01.me.local
                    CName, frontline, prod-web01.me.local

when I set this up in DNS
nslookup to dev.frontline resolves to dev-web01.me.local
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:
correction
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.
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N-WCommented:
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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