I had no time to debug the issue yet -- as usual,
issues comes in batches, you discover somethin
does not work when trying to fix something else
(and so on)... 
It seems that upgrading to 1.3.1 from 1.3.0 breaks
root forward zone. Ie, if there's a zone declaration
forward-zone:
name: "."
forward-address: 1.2.3.4
this declaration is ignored and normal way to resolve,
using usual set of root nameservers, is used instead.
Reverting back to 1.3.0 fixes it.
Maybe it's my build somehow, I don't yet know -- today
was a difficult day for me 
JFYI. I'll try to debug it further tomorrow.
/mjt