AWS DNS Problem or am I too stupid?

Hey guys,
I just setup a new account and migrated some services over from another account and pretty much 1-1 recreated my old setup.
After launching a few instances I noticed that none of them could resolve any DNS names, while connectivity was fine since I could connect to IP-addresses without issues both in my VPC and on the internet.
I finally found the that if I added another VPC options set with domain name servers set to google's 8.8.8.8 and after rebooting my instances all can resolve DNS just fine. Why does the default options set with AmazonProvidedDNS not work? Is there something I can do to fix it?

Thanks for any insights!