I have been running into the same problem. and i preformed the same tests. with…

both the client and server as Virtual on the same host
both the client and server as physical machines.
client as a VM and server as a physical machine.
Client as a physical machine and the server as VM.

In every test it’s been the same DHCP server using the same subnet and IP address’s.
In each test the client and server can ping each other both by IP and Hostnames. (DNS and DHCP run off the same server)

I’ve been getting the following error every time i try to boot any computer to network

PXE-T01: File not found
PXE-E3B: FTTP Error - File not found
PXE-M0F: Exiting Intel PXE ROM

My setup is as follows

DHCP Server - IP 10.192.230.131
Windows 2008 Server
Option 66 = 10.192.230.205
Option 67 = pxelinux.0 < zero not a “O”

Fog Server - IP 10.192.230.205
Ubunut 10.04 - Desktop
Fog Server 0.32

everything seems to be ok with the fog installation.
the webinterface is working correctly. and i’m able to add and delete host/images/ect. with no problems.

I’ve done the following testing to find out whats causing the problem.

Captured the DHCP Offer Packet to a test client and get the following information
(Capture was done in VM Player)

Bootp flags: 0x0000 (Unicast)
Client IP Address: 0.0.0.0
Your IP : 10.192.230.164
Next Server IP : 10.192.230.205 <This is the correct address
relay agent IP: 0.0.0.0
Client MAC: Vmware_00:37:8a
server host name not given
boot file name: pxelinux.0
…
…
…

using the same test VM client i was successful in pulling the pxelinux.0 file using tftp
(tfpt 10.192.230.205 get pxelinux.0)

I’m sorry if the post comes off as a little lost. i have been working at this problem for the last few days and
haven’t gotten anywhere.

And help would be greatly welcomed at this point.