For my LAN facing wired static interface (eth0) I don't use allow-hotplug, I use auto eth0 so that it is up when I boot (is not waiting for a hotplug event) and also don't specify the broadcast address. My interfaces file looks like this and works fine:
# This file describes the network interfaces available on your system
# and how to activate them. For more information, see interfaces(5).
# The loopback network interface
iface lo inet loopback
iface eth0 inet static
iface wlan0 inet dhcp
iface eth1 inet dhcp
(I have 2 wireless interfaces, one wlan0 built into laptop and another USB interface eth1 which is better with weak signals and not always connected). This config allows eth0 to always be up awaiting connections from LAN and I use Wicd to manage the internet facing wireless interfaces (so it ignores the config for wlan0 and eth1 anyway).