Lion "hosts" File Bug
Solution 1:
All additional entries to the HOSTS file must be above the:
fe80::1%lo0
Make sure there is at least one line break after the last entry. Like so:
127.0.0.1 LLL.localhost
127.0.0.1 LLL.localhost
#
Although you probably can't tell, there is another line following the # symbol. One more thing to mention, using Space instead of Tab between 127.0.0.1 and localhost might help too.
Solution 2:
You'll need to follow ioi's answer to the T to get this to work correctly. I think the real trick might be the extra line at the end of the file.