Problem with DHCP-enabled clients

[Phusion]

I am having a problem with DHCP-enabled clients on my test network.
The servers are running on the test.com domain while the DHCP-enabled
clients are on the mdnlan.test.com domain. The DHCP computers get
domain names of computername.mdnlan.test.com. The DNS server is named
smdndnsp1.test.com. This server also runs the DHCP service. These
computers are having problems pinging the computers on the test.com
domain.

- ping from testcomp.mdnlan.test.com to dns.test.com works
- ping from testcomp.mdnlan.test.com to dns fails

Here is a copy of the dhcpd.conf file.

option domain-name "mdnlan.test.com";
option domain-name-servers smdndnsp1.test.com;

default-lease-time 1800;
max-lease-time 3600;
authoritative;
ddns-domainname "mdnlan.test.com";
ddns-update-style interim;
one-lease-per-client true;
pid-file-name "/var/run/dhcpd.pid";
log-facility local7;

key mdnlan {
        algorithm HMAC-MD5.SIG-ALG.REG.INT;
        secret yfmizFMbQwJGDEAscbDv9+bnnxHUkzKoNbDvBm8pUEiwBZBkjEFni5RDvE9l5eRh5iVa9DzZaEo/iqLSErL6Pg==;
};

zone 1.1.10.in-addr.arpa. {
        key mdnlan;
        primary 127.0.0.1;
}

zone mdnlan.test.com. {
        key mdnlan;
        primary 127.0.0.1;
}

subnet 10.1.1.0 netmask 255.255.255.0 {
  option routers 10.1.1.1;
  pool {
    range 10.1.1.100 10.1.1.150;
  }
}

I'm not sure what the problem is. Let me know. Thanks.

Phusion