dig is not able to locate the local DNS server. Here's what happens:
dig @127.0.0.1
---several moments go by ---
; <<>> DiG 9.2.1 <<>> @127.0.0.1
;; global options: printcmd
;; connectiion timed out; no servers could be reached

however, rndc -s 127.0.0.1 status produces this:
number of zones: 4
debug level: 0
--more interesting counts of this and that--
server is up and running

and, ps -ef | grep named produces this:
named 1344 1 0 12:26 ? 00:00:00 /usr/sbin/named -u named

so, it seems dig just isnt able to talk to named.

here is the named.conf:

options {
directory "/var/named";
// query-source address * port 53;
};

controls {
inet 127.0.0.1 allow { localhost; } keys { rndckey; };
};
zone "." IN {
type hint;
file "named.ca";
};

zone "localhost" IN {
type master;
file "localhost.zone";
allow-update { none; };
};

zone "0.0.127.in-addr.arpa" IN {
type master;
file "named.local";
allow-update { none; };
};

include "/etc/rndc.key";

and the rndc.conf:

options {
default-server localhost;
default-key "rndckey";
};

server localhost {
key "rndckey";
};

include "/etc/rndc.key";

the rndc.key file :

key "rndckey" {
algorithm hmac-md5;
secret "<<some long string of characters>>";
};

I am a newbie to DNS/dig/etc and I don't know where to go from here. Can someone help ?

Thanks

Do you have any firewall rules blocking port 53?

No, My iptables rules allow both tcp and udp from both 127.0.0.1 and the address bound to the single ethernet card.
Thanks for the suggestion

Does netstat show it listening:
netstat -nlp

David, I think it is listening, although netstat does list something for port 53 in several places. Here's the output of netstat -nlp

Active Internet connections (only servers)
Proto Recv-Q Send-Q Local Address Foreign Address State PID/Program name
tcp 0 0 0.0.0.0:901 0.0.0.0:* LISTEN 754/xinetd
tcp 0 0 0.0.0.0:139 0.0.0.0:* LISTEN 952/smbd
tcp 0 0 127.0.0.1:783 0.0.0.0:* LISTEN 819/spamd -d -c -a
tcp 0 0 0.0.0.0:6000 0.0.0.0:* LISTEN 1062/X
tcp 0 0 192.168.0.111:53 0.0.0.0:* LISTEN 1344/named
tcp 0 0 127.0.0.1:53 0.0.0.0:* LISTEN 1344/named
tcp 0 0 127.0.0.1:631 0.0.0.0:* LISTEN 860/cupsd
tcp 0 0 127.0.0.1:953 0.0.0.0:* LISTEN 1344/named
tcp 0 0 127.0.0.1:25 0.0.0.0:* LISTEN 800/sendmail: accep
udp 0 0 0.0.0.0:32770 0.0.0.0:* 1344/named
udp 0 0 192.168.0.111:137 0.0.0.0:* 956/nmbd
udp 0 0 0.0.0.0:137 0.0.0.0:* 956/nmbd
udp 0 0 192.168.0.111:138 0.0.0.0:* 956/nmbd
udp 0 0 0.0.0.0:138 0.0.0.0:* 956/nmbd
udp 0 0 0.0.0.0:930 0.0.0.0:* 754/xinetd
udp 0 0 192.168.0.111:53 0.0.0.0:* 1344/named
udp 0 0 127.0.0.1:53 0.0.0.0:* 1344/named
udp 0 0 0.0.0.0:631 0.0.0.0:* 860/cupsd
udp 0 0 192.168.0.111:123 0.0.0.0:* 774/ntpd
udp 0 0 127.0.0.1:123 0.0.0.0:* 774/ntpd
udp 0 0 0.0.0.0:123 0.0.0.0:* 774/ntpd
Active UNIX domain sockets (only servers)
Proto RefCnt Flags Type State I-Node PID/Program name Path
unix 2 [ ACC ] STREAM LISTENING 2486 1243/gconfd-2 /tmp/orbit-root/linc-4db-0-792e4a2d3cc30
unix 2 [ ACC ] STREAM LISTENING 1754 838/cannaserver /tmp/.iroha_unix/IROHA
unix 2 [ ACC ] STREAM LISTENING 1870 904/jserver /tmp/jd_sockV4
unix 2 [ ACC ] STREAM LISTENING 2101 1012/gdm-binary /tmp/.gdm_socket
unix 2 [ ACC ] STREAM LISTENING 2494 1172/gnome-session /tmp/orbit-root/linc-494-0-700997ee473a1
unix 2 [ ACC ] STREAM LISTENING 2597 1245/bonobo-activat /tmp/orbit-root/linc-4dd-0-48fa3c40da6ab
unix 2 [ ACC ] STREAM LISTENING 2618 1247/gnome-settings /tmp/orbit-root/linc-4df-0-1e59734920a2f
unix 2 [ ACC ] STREAM LISTENING 2685 1258/metacity /tmp/orbit-root/linc-4ea-0-288ccca87c78b
unix 2 [ ACC ] STREAM LISTENING 2715 1266/magicdev /tmp/orbit-root/linc-4f2-0-7a5d04f41b610
unix 2 [ ACC ] STREAM LISTENING 2735 1262/gnome-panel /tmp/orbit-root/linc-4ee-0-7a5d04f440edd
unix 2 [ ACC ] STREAM LISTENING 2756 1264/nautilus /tmp/orbit-root/linc-4f0-0-7a5d04f497885
unix 2 [ ACC ] STREAM LISTENING 2775 1268/eggcups /tmp/orbit-root/linc-4f4-0-7a5d04f4b3a27
unix 2 [ ACC ] STREAM LISTENING 2865 1283/gweather-apple /tmp/orbit-root/linc-503-0-1f084aca646ba
unix 2 [ ACC ] STREAM LISTENING 2894 1272/python /tmp/orbit-root/linc-4f8-0-1f084aca9cc4b
unix 2 [ ACC ] STREAM LISTENING 2929 1288/gnome-terminal /tmp/orbit-root/linc-508-0-16536338d7f33
unix 2 [ ACC ] STREAM LISTENING 1737 828/gpm /dev/gpmctl
unix 2 [ ACC ] STREAM LISTENING 1919 943/xfs /tmp/.font-unix/fs7100
unix 2 [ ACC ] STREAM LISTENING 2111 1062/X /tmp/.X11-unix/X0
unix 2 [ ACC ] STREAM LISTENING 2464 1240/ssh-agent /tmp/ssh-XXNwrKHh/agent.1172
unix 2 [ ACC ] STREAM LISTENING 2587 1172/gnome-session /tmp/.ICE-unix/1172

lines 6 and 7 show named listening on port 53 to the l0 and eth0 connections, but there are lines lower in the output that also mention port 53 with no indication that the process is listening, although it is the same pid.

Thanks for your input - I hope this helps get Me closer .