Description of problem:
ntpd silently fails if the loopback device is unavailable.
ntpd should either fail with an error message or, preferably, should only use lo
when it is available.
See Bug 293271 for a discussion leading up to this bug.
Fixed in ntp-4.2.4p2-6.fc8. Thanks for the report.
I'll prepare an F7 update when there are more ntp bugs to be fixed.