We used a 7206 router with an ATM interface to connect to our DSL switches. We also use PPPoE with DHCP. We noticed that when a DSL client reaches the DHCP half-life and does a renew request the router (acting as a relay) unicasts the request to our DHCP server, but when the router receives the request back it broadcasts it to all our DSL clients and our DSL modems cannot process this. Any thoughts?
The DHCP Offer should be unicast (and not broadcast) unless the client equipment does not support it. It is most likely a limitation on the end-equipment and not on the Cisco 7206VXR router acting as DHCP Relay.
Check RFC1542 (3.1.1 The BROADCAST flag).
Use a packet sniffer to confirm that the end-equipment is indeed sending DHCP Request with the Broadcast flag set...
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