The DHCP is running in cisco 3550 and we have upgraded the Desktop from XP to Win 7 , After upgrading the OS win 7 the dhcp is leased multiple IP address to single MAC address and the updated client record as in use, So dhcp pool got full .
Hence other users are not gettign IP address , If removed the win 7 pc from the network , everything started wotrking fine.
client 0100.262d.fba2.1a is getting an offer from the DHCP server but it issues a gratuitous ARP to verify this IP is not already on the network and it receives a reply so it sends a DECLINE to the server so it means the suggested IP for the server was not already assigned( not in its pool and no reply to ping) so it would be worth debugging this issue.
Could you clear the arp cache on the switch, turn on this debugging: debug ip dhcp server packet and also post output of sh run | s dhcp and sh ip dhcp pool and sh ip dhcp server statistic after plugging back the Win 7 machines.
At the same time can you sniff on the Windows 7 machine in promiscuous mode and filter on arp and udp port 67 or udp port 68 and attach capture file.
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