The first thing that you have to do when setting up OS X server is to have a working DNS Setup. It does not have to be on OS X -it could be on Windows, Unix/Linux, whatever- but it has to be able to resolve, both forward and reverse, the IP address and hostname of the server that you are setting up. If it doesn't, then you find yourself in the exact situation that you guys are in now. Fixing DNS, fixes your problem.
Also, if you are setting up a domain to use with an OD server, chose anything else but '.local' for your domain. Net, foo, dog, bone. Anything.
If you are going to use a Mac with a single Ethernet port and intend to host multiple services with different IP addresses
and that will depend on Kerberos and OD, only configure the address for the server's primary IP address first then promote to OD/bind to an OD master, then add the interfaces/IP addresses for your other services, then add the Kerberos principals for those services after they are setup and working. Oh, make sure that the hostnames that you chose for those services, resolve both forward and reverse in DNS.
Check your DNS with 'dig' in Terminal.app:
dig odmaster.test.net
; <<>> DiG 9.4.3-P1 <<>> odmaster.test.net
;; global options: printcmd
;; Got answer:
;; ->>HEADER<<- opcode: QUERY, status: NOERROR, id: 42931
;; flags: qr aa rd ra; QUERY: 1, ANSWER: 1, AUTHORITY: 2, ADDITIONAL: 2
;; QUESTION SECTION:
;odmaster.test.net. IN A
;; ANSWER SECTION:
odmaster.test.net. 28800 IN A 192.168.1.24
;; AUTHORITY SECTION:
test.net. 28800 IN NS ns2.test.net.
test.net. 28800 IN NS ns1.test.net.
;; ADDITIONAL SECTION:
ns1.test.net. 28800 IN A 192.168.1.254
ns2.test.net. 28800 IN A 192.168.1.253
;; Query time: 15 msec
;; SERVER: 192.168.1.254#53(192.168.1.254)
;; WHEN: Thu Jul 30 11:01:19 2009
;; MSG SIZE rcvd: 120
dig -x 192.168.1.24
; <<>> DiG 9.4.3-P1 <<>> -x 192.168.1.24
;; global options: printcmd
;; Got answer:
;; ->>HEADER<<- opcode: QUERY, status: NOERROR, id: 35202
;; flags: qr aa rd ra; QUERY: 1, ANSWER: 1, AUTHORITY: 2, ADDITIONAL: 2
;; QUESTION SECTION:
;24.1.168.192.in-addr.arpa. IN PTR
;; ANSWER SECTION:
24.1.168.192.in-addr.arpa. 28800 IN PTR odmaster.test.net.
;; AUTHORITY SECTION:
1.168.192.in-addr.arpa. 28800 IN NS ns1.test.net.
1.168.192.in-addr.arpa. 28800 IN NS ns2.test.net.
;; ADDITIONAL SECTION:
ns1.test.net. 28800 IN A 192.168.1.254
ns2.test.net. 28800 IN A 192.168.1.253
;; Query time: 8 msec
;; SERVER: 192.168.1.254#53(192.168.1.254)
;; WHEN: Thu Jul 30 11:01:33 2009
;; MSG SIZE rcvd: 143
substitute your server hostnames and IPs. If 'dig' doesn't return the correct authoritative information, fix your DNS.
Did I mention that you should choose anything but '.local' as your domain?