I can't tell this DSL proxy to do my name requests, or else I wouldn't be able to communicate on our local LAN, or be able to connect the servers at HQ.

I don't think you quite understood the previous point about proxies and DNS. When you use an HTTP proxy, it doesn't use that proxy as a DNS server, which you seem to follow, but your web browser makes a connection to the proxy and makes a request that looks something like ``GET http://ads.doubleclick.com/annoyingads/004.html HTTP/1.1''. Note that it's including the full URL, not just the pathname in the GET request. That's because the proxy server has to connect to that remote host. The problem likely lies here, in that your proxy host is now making a DNS request for ads.doubleclick.com. And since it's a remote host, it has no way of seeing the hosts file you've installed on your local machine. (As far as the ``ignore proxy for local hosts'' option that was mentioned, I don't know. It may ignore the 127/8 network for some reason. (Or are you using the 0.0.0.0 form of the hosts file?) Microsoft products have had weirder problems.)

As I see it, your solution for this problem lies in changing the hosts file on the proxy, which you may not want to do since it will affect everyone using that proxy. You might also try pointing them to an IP address you have on your local network and set that ``ignore proxy for local hosts'' option. That might work better. Then again, it might not.

As a test, you could change your routing manually temporarily and have it make requests directly out your DSL line, but you might have other routing or addressing problems there that I don't know about that make that unfeasible.

Edit: You might also want to try pinging ads.doubleclick.net or some other hosts listed in your hosts file from your workstation, just to make sure that it's getting that IP address from your hosts file. (I know you said that your empeg entry works fine, but check one of the failing ones, just to make sure that it's not the exception.)