Stumbled upon your site using google (the os x hosts article).

Had this problem recently… this may or may not fix your problem:

pop in os x CD and hold C while the computer boots

go to the disk utility and run a repair on the disk. when this happened to me it was because my home directory’s permissions had somehow gotten screwed up.

Anyway, hope you fix your problem… but Apple should replace a failed piece of hardware if you go to the store and sweet talk the store manager (and for free, too).