Update: It looks like as of Mavericks this doesn’t quite behave like it used to. It will still append search domains on lookups involving only a single domain level, however if you do multi-level look-ups like. it will not append any search domains. Looking through the mDNSResponder binary there doesn’t appear to be any new addition flags to change this behaviour :(

Thanks to Erik for pointing this out, he has also put up a easy HOWTO for fixing this on his blog.

So it turns out all is not lost, you can still revert to the original behaviour of apples resolver! They’ve added a parameter to mDNSResponder called
-AlwaysAppendSearchDomains. Implying that this new behaviour was very intentional. I had read that Windows apparently made a similar change in one of there past updates as well so I guess this is to help fight some phishing attacks maybe? Either way, tres-annoying!

Anyway the gist of how to fix it is this:

Open up /System/Library/LaunchDaemons/com.apple.mDNSResponder.plist and add
-AlwaysAppendSearchDomains following parameter to the list in the ProgramArguments block:

Then reload the launchd config for it, this should take care of restarting it as well:

launchctl unload -w /System/Library/LaunchDaemons/com.apple.mDNSResponder.plist
launchctl load -w /System/Library/LaunchDaemons/com.apple.mDNSResponder.plist

And…

icarus:~ bseibel$ ping util01.tor
PING util01.tor.verticalscope.com (67.223.104.5): 56 data bytes

YAY!