Using file_get_contents or curl to url on same server
Ok, I still don't know why the hell it's doing this, but I'm going to solve it by running my feed through feedburner and then parsing it's RSS feed. Because it's on a remote domain, it works in my tests. Not ideal, but w/e.
I just had this similar issue. The DNS is the problem, it is not resolving your domain name. You should use the IP instead of the domain in your scripts.
You can ping your domain in cmd and use that IP.
I had a very similar problem - you might try using 127.0.0.1 instead of your own domain name (assuming your apache setup doesn't prevent you doing that). Something to do with domain resolution I believe, quirk of the api.