Problems Creating a Domain in VirtualBox

Question

To Create a test environment to try out things like Group Policy and Windows MDOP in our work environment, I was charged with creating a set of VM's using virtualbox that would consist of 2 Clients and a Server. The server would fill the role of Domain Controller,
Group Policy Server Side (MDOP) and to test things like the new roaming profile replacement. 
I am a desktop tech, having just begun self-educating on Group Policy Management and all these attempts at server management are self-taught. So, if there are any clear and foolish mistakes, please point them out as I will not be offended.
Since I am creating a separate Domain, I setup these VMs on the internal network that VBox offers, they can only communicate with each other (Internal Network: Default name: "intnet"). This worked just fine, all three could ping each other etc.
I installed a trial version of Server 2008 R2 to use as my DC and went about configuring it, I set a static IP and DNS settings.  Disabled IPv6 and setup IPv4 as follows
Static IP:
IP address: 169.254.254.3
Subnet Mask: 255.255.0.0
Default Gateway: 169.254.254.0
Preferred DNS Server: 127.0.0.1 (I put in 169.254.254.3) but it auto-fills 127.0.0.1
I've been told by multiple people I either need, or need to not, have a default gateway sent. I've tried it both ways with the same result.
After that, I used DC Promo to create a forest and domain called testlab.local
This installed DNS and created a forward lookup zone of the same name.  (Sorry can't post screencaps yet)
DNS
>DC01
>>Global Logs
>>Forward Lookup Zones
>>>Msdcs.testlab.local
>>>testlab.local   - 2 Records show 
>>>>>>>>>>>>> (same as parent folder)      Start of Authority(SOA)     [3], dc01.testlab.local., hostmaster.testlab.local     static
>>>>>>>>>>>>> (same as parent folder)     Name Server(NS                dc01.testlab.local.
Now I noticed that there is no "A" Host file. But I tried to join my first client to the domain with the following IP config
Static IP:
IP address: 169.254.254.8
subnet mask: 255.255.0.0
Default Gateway: Blank
Preferred DNS: 169.254.254.3
And then tried to join the domain.
Computer Name: image1
Member of:
Domain: testlab.local 
However I received:
An Active Directory Domain Controller (AD DC) for the domain. "testlab.local" could not be contacted
Ensure that the domain name is typed correctly
Details:
The following error occurred when DNS was queried for the service location (SRV)
resource record used to locate an Acitve Directory Domain Controller (AD DC) for domain "testlab.local".
The error was "DNS name does not exist."
(error code 0x0000232B RCODE_NAME_ERROR)
The query was for the SERV record for _ldap_tcp.dc._msdcs.testlab.local
common causes of this error include the following: 
-The DNS SRV records required to locate a AD DC for the domain are not registered in DNS. These records are registered with a DNS server automatically when a AD DC is added to a domain. They are updated by the AD DC at set intervals. This computer is configured
to use DNS servers with the following IP addresses:
169.254.254.3
One or more of hte following zones do not include delegation to its child zone:
testlab.local
local
(the root zone)
I tried adding a "A" host record with DC01 (the name of the DC) to the DNS records but it disappears after a few minutes. Can anyone tell me what I'm doing wrong?
I would greatly appreciate any help. I can provide more data if needed. 

Answer 1

I have another developer with the same issues.
After another CLEAN install, with admin rights to the system he get's exactly the same issue!
Is there someone who can assist please.
Stuart