hey Marvin, I'm also very interested in running sandstorm in a libre mesh network.
I understand that lime takes care of propagating the hostnames in a network (it does take a few minutes to do that once in have a new computer connected). I guess you could have several names in the /etc/hostname file, and they would all propagate, but I never tested that.
The dnsmasq is simple, all you have to do is add a line to the dnsmasq.conf file, such as
address=/.sandstorm.local/10.7.0.10
Thus, all *.sandstorm.local requests would be redirected to 10.7.0.10.
But this needs to be changed in all nodes, so the best is to have it changed in the chef configuration, so you'll have a firmware with this feature to be installed in all routers.