By chance have dual NIC cards (or more)? 169.254 is the default IP addr used by many versions of Microsoft windows for an unconfigured NIC...

Basically it looks to me like your system is getting the DNS request in on one interface and then for some reason a response is being picked up on the unconfigured NIC and being properly dropped by the firewall...I would check and make sure all non-configured interfaces are disabled, that you haven't enabled IPforwarding, and then have a look again...