Incorrect reporting on dropped packets seems to be a known issue since a while:
Yes, I've found this KB recently. Thank You!
As I mentioned in previous post the only dropped packets I see for the moment are ethertype 0x8922 packets
The 0x8922 ethertype broadcasts are used not only for beacon probing, but also for the new 5.1 distributed vSwitch network health check feature. Have you enabled that?
The source MAC of these frames is encoded in the format 00:50:56:5[random Value]:[Last 2 Byte of the physical vmnic MAC].
This is exactly what I see. Many thanks for the lead. Disabled Health Check - no more broadcasts
The only thing left is when Health Check is ON again all my Ubuntu (13.04) VMs are reporting dropped packets which completely correspond to ethertype 0x8922 broadcasts captured by tcpdump from another VM.
user01@ubuntu01:~$ ifconfig eth0
eth0 Link encap:Ethernet HWaddr 00:50:56:bf:7c:48
inet addr:10.113.0.177 Bcast:10.113.0.255 Mask:255.255.255.0
inet6 addr: fe80::250:56ff:febf:7c48/64 Scope:Link
UP BROADCAST RUNNING MULTICAST MTU:1500 Metric:1
RX packets:3250670 errors:0 dropped:91575 overruns:0 frame:0
TX packets:4468580 errors:0 dropped:0 overruns:0 carrier:0
collisions:0 txqueuelen:1000
RX bytes:2785809569 (2.7 GB) TX bytes:2847014532 (2.8 GB)
I presume Ubuntu is not able to recognize them. Tried different nic types. vmtools are the latest. Is there any solution to that?