This is rather bad since you mention this is an SBS domain:
> The configured DNS servers for the LAN NIC are:
> - 10.1.1.1 (the server in question)
> - 139.130.4.4 (Telstra's DNS server)
Clients and servers participating in an AD Domain should only use DNS servers that are able to answer for the AD domain. In short, they must use the SBS server for DNS and nothing else. If you want or need to use Telstra's server you can add it to the Forwarders tab in the properties for the DNS server (DNS Console).
It would explain this:
> C:\>ping able.serv.local
> Ping request could not find host able.serv.local. Please check the name and try
> again.
If "ping" asked Telstra's DNS server and they said "what? No. Doesn't exist" your system will remember that for 5 minutes before attempting to resolve the name again. Once it tries again you're back to pot-luck on whether or not you get the correct reply from the right DNS server.
Chris