As of the time of this writing, the so-called "DNS tunneling" in proxyresolv is nothing more than an exec() call to the popular DNS tool dig. It doesn't actually use SOCKS 5's domain name resolution feature.

Proxyresolv is basically hard-coded to exec() to dig, using the public DNS server 4.2.2.2, and scraping the dig output via awk. It manages to do this very badly.

Here's the dig output:
; <<>> DiG 9.6.0-APPLE-P2 <<>> google.com @4.2.2.2 +tcp ;;;...blah blah... ;; QUESTION SECTION: ;google.com. IN A ;; ANSWER SECTION: google.com. 247 IN A 66.249.89.104 google.com. 247 IN A 66.249.89.99 ;; ...blah blah...

And here's the awk invocation in the proxyresolv shell script:
dig $1 @$DNS_SERVER +tcp | awk '/A.+[0-9]+\.[0-9]+\.[0-9]/{print $5;}'

See, the problem is that by trying to pick up any numeric sequences after an occurrence of "A" (and blatantly including the semicolon'ed lines, which denote comment lines rather than output), it actually picks up the first line of dig output on OS X. You know, where the "A" appears in "APPLE-P2"...

And here's the output from that awk:
<<>> 66.249.89.104 66.249.89.99

Instead, if you changed that line into something more reasonable by excluding comment lines:
dig $1 @$DNS_SERVER +tcp | awk '/^[^;].+A.+[0-9]+\.[0-9]+\.[0-9]/{print $5;}'

It should no longer fail so horribly. Remember, this only works for the current version of dig on OS X 10.6. If dig changes its output format, in the worst case that whole expression would have to be rewritten.

In the long run, hard-coding parsing expressions and presuming dig output will never change is a rather unfortunate idea. I don't think you can get away with not resolving hostnames via SOCKS 5's built-in capability. Further, hard-coding the DNS server to use is a pretty terrible idea too.