So how can you fix this potentially life-ruining problem? Well until Apple patches its OS -- and it's currently unclear if this is just iOS 4.2.1 or earlier versions as well -- you can simply create a recurring alarm at the time you need to be woken up, and then disable it once your dreams are completely ruined. We're taking a deeper look into the issue and have contacted Apple -- if we get more news, you guys will be the first to know. In the meantime, feel free to commiserate in comments, and... happy new year?
Update: 9to5 Mac says that the bug will get fixed all by itself once the calendar hits January 3rd. We haven't confirmed this, but if it turns out to be the case, that's pretty good news. In less good news, the issue seems to be affecting iOS 4.1 and 4.0.2 as well.
Update 2: Apple responded to us on the issue, though they didn't offer any surprises:
[Thanks to everyone who sent this in]We're aware of an issue related to non repeating alarms set for January 1 or 2. Customers can set recurring alarms for those dates and all alarms will work properly beginning January 3.