When system not applying hostname [hostname: the specified hostname is invalid]

A few days ago, I've found a strange problem on one Ubuntu server (12.04) instance. It was a Xen vps from one of the Finnish providers, the problem is that the hostname does not read by system as expected (from /etc/hostname).
Sure, /etc/hostname contain absolutely correct hostname, but when I tried
root@(none): hostname -F /root/hostname

I get just

hostname: the specified hostname is invalid

Also comands like start/restart hostname or /etc/init.d/hostname reload/stop/start always fails with very informative:

: Job failed to start

strace hostname -F /etc/hostname also not showing any interesting information. So the answer will in the hostname (/bin/hostname). When I look in the end of strace output I sow this:

mmap(NULL, 4096, PROT_READ|PROT_WRITE, MAP_PRIVATE|MAP_ANONYMOUS, -1, 0) = 0x7fb8e529c000

read(3, "example.org\r\n", 4096)= 9

close(3)

example.org\r\n

What the hell? How can windows-like new line character be in that file.

After run file /etc/hostname:
/root/hostname: ASCII text, with CRLF line terminators

file tell me what was the reason of hostname command fails.

And one very useful thing is od.
root@(none): cat /etc/hostname | od -c

0000000 e x a m p l e . o r g \r \n

0000011

Will show ASCII characters, including terminator.

To convert CR-LF to Unix-like LF vim is the easy way, just do :set ff=unix or :set fileformat=unix and save file.

So, problem is found. Someone (very good person) write hostname from windows like editor to /etc/hostname, and /bin/hostname can't normally read this file due CR-LF terminator.

And the last correct way to set hostname (if something goeing wrong with hostname command) is to set kernel parameter in sysctl.conf file (/etc/sysctl.conf).
Syntax is pretty simple:
kernel.hostname = example.org then, reload kernel parameters
sysctl -p

(Big thanks to provider admins for installing Ubuntu from broken template or for use Windows to write system configs in Linux).