Our AirPort Extreme distributes incorrect DNS servers via DHCP to its clients

We're failing to get our AirPort Extreme to allow local Windows clients to connect to our internal services. And

This is our setup:

The AE is hooked up to a LAN port, not the outside world. It is set up with IPv4 internal adresses: 10.1.1.170 for itself, 10.1.1.1 as the router address (our firewall), and 10.1.1.5 as the primary DNS server - serving our companyname.local zone, and with a secondary DNS-server address, coming from our ISP for external lookups.

The AE is creating a wireless network.

I've tried a number of setups - and they all fail to distribute the correct internal DNS server to its clients.

With Connection Sharing set to "Share a public IP address", IPv4 configuration set to "Manually" using the IPv4 addresses mentioned above (and empty IPv6 addresses), and a DHCP range for clients between 192.168.1.2 and 192.168.1.52, I get these TCP/IP-settings in a Windows client:

Wireless LAN adapter Wireless Network Connection 2:

Connection-specific DNS Suffix . : companyname.local

Description . . . . . . . . . . . : Intel(R) WiFi Link 5100 AGN #2

Physical Address. . . . . . . . . : 00-26-C6-C9-76-14

DHCP Enabled. . . . . . . . . . . : Yes

Autoconfiguration Enabled . . . . : Yes

Link-local IPv6 Address . . . . . : fe80::ddec:64bd:1d38:5efb%12(Preferred)

IPv4 Address. . . . . . . . . . . : 192.168.1.8(Preferred)

Subnet Mask . . . . . . . . . . . : 255.255.255.0

Lease Obtained. . . . . . . . . . : 4. oktober 2012 11:04:37

Lease Expires . . . . . . . . . . : 5. oktober 2012 11:04:37

Default Gateway . . . . . . . . . : 192.168.1.1

DHCP Server . . . . . . . . . . . : 192.168.1.1

DHCPv6 IAID . . . . . . . . . . . : 369108678

DHCPv6 Client DUID. . . . . . . . : 00-01-00-01-14-D8-88-20-00-22-68-0D-7B-75

DNS Servers . . . . . . . . . . . : 192.168.1.1

NetBIOS over Tcpip. . . . . . . . : Enabled

The AE sets up itself as the gateway, the DNS server and the DHCP server, but fails to act as a DNS server.

I believe the AE should have been either distributing the correct DNS server addresses OR it should pass on the DNS-requests to its own primary DNS server (10.1.1.5). Clients will now fail to look up internal servers:

Default Server: UnKnown

Address: 192.168.1.1

> bombay.exprosoft.local (a host on our LAN)

Server: UnKnown

Address: 192.168.1.1

DNS request timed out.

timeout was 2 seconds.

DNS request timed out.

timeout was 2 seconds.

*** UnKnown can't find bombay.exprosoft.local: Non-existent domain

Looking up something external, say www.google.com will first result in a DNS timeout, then work using a secondary DNS, like this:

> www.google.com

Server: UnKnown

Address: 192.168.1.1

DNS request timed out.

timeout was 2 seconds.

Non-authoritative answer:

Name: www.google.com

Addresses: 2a00:1450:4010:c03::63

74.125.143.103

74.125.143.147

74.125.143.99

74.125.143.105

74.125.143.104

74.125.143.106

If I change the Connection Sharing to "Distribute a range of IP addresses" changes all DNS settings distributes via the wireless network to IPv6!!

It renders everything completely useless, both internal and external lookups will fail. There is not even a route to my LAN using direct IPv4 addresses anymore! I'm pretty sure this is another bug in the AirPort Extreme.

Any help deeply appreciated!