It appears that Apple made a significant change to the process by which hosts in .local domains are resolved in Yosemite and iOS8. Basically, Apple now assumes that .local domains are used by the Bonjour service. Prior to the Yosemite release, OS X would resolve names via DNS then Bonjour. In Yosemite and iOS 8, .local domains are resolved first by the Bonjour service. After issuing the following command in the terminal app will allow you to resolve .local FQDNs again.
sudo discoveryutil mdnsactivedirectory yes
This command forces OS X to us regular unicast DNS for .local domains rather than just using mutlicast DNS (mDNS, aka Bonjour) to resolve .local domains.
Using .local domains is very common in many Windows-based networks. I’ve run across this issue with a couple of Mac users who found they could not longer remotely connect in to their office network after installing the Yosemite update.
Thanks to the following discussion thread and blog for the soluttion: