I'm surprised it was working as a basic router in the first place... it shouldn't have been able to route at all.
basically, you cannot have subnets on your wan and lan that are the same or overlap. This configuration creates ambiguity in the routing table. Simple analogy -- you walk into a room with a package to deliver to John... you get in there, and there are two people named John. Now you cannot reliably complete the task because you cannot be certain which John is supposed to get the package.
No, it doesn't work that way. The subnet you were using on both your lan and wan was 192.168.1.0/24 (/24 or subnet mask 255.255.255.0 -- these are equivalent ways of expressing it). The subnet mask/CIDR bits value defines the size of the network... in this case:
- The network ID is 192.168.1.0
- host ranges from 192.168.1.1-192.168.1.254.
- The broadcast address is 192.168.1.255.
The DHCP server doesn't play into the size -- that is defined by the CIDR/subnet mask values. All the DHCP server actually does is assign addresses to hosts on the network. So, let's use another analogy... a theater with ushers who seat the guests (let's assume that the ushers select the seats)... what you did previously was assign two ushers with different sections of the same theater. What needs to happen is that you need two ushers who seat guests in two entirely different theaters.
By changing the address to 192.168.2.1, you've made a non-overlapping network.
You can read more about subnets in lots of places like this wikipedia article, and also play with a subnet calculator.
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