i had the problem today (hardy 8.04 32 bit install), with all the updates 
installed... 
so i believe there is still some problem

however I fixed it by using

gksu gedit /etc/hosts
and just adding the hostname in front of 127.0.0.1 (as mentioned earler)

is there a way that any configuration dump will help. the please mention it
don't ask for hosts file, i believe that is not the problem.

The problem occurred because i overwritten my /etc/hosts with someone
else's hosts file (don't ask why!), so as i said the hosts file is just
fine.

-- 
sudo fails if it cannot resolve the local hostname and no MTA is installed
https://bugs.launchpad.net/bugs/32906
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