No match was found... Reverse DNS must have a matching forward entry that points to

You need to have a matching forward A record set up first. If you just did that, you'll need to wait for propagation before the system can pick it up to apply a reverse record. This can take a few hours, or up to 24-28 hours in some situations.

Thanks mkorsak. I'm confused by the example Linode give underneath the entry field - Example: host.yourdomain.com

This makes me feel like i'm meant to use the name I put in my /etc/hostname file followed by my url (which still generates the error message).

When I type in just the url of my website (without the hostname beforehand) the reverse DNS works. Is that the right thing to do? : example.com rather than hostname.example.com

Any subdomain will work, or root domain. Depends on whatever rDNS entry you need. Most would set it to either the root (example.com), or whatever your FQDN is.