NIOS LWIP socket server not working after DHCP fai

I am using the NIOS LWIP socket server example and have it connected directly to a PC via reverse ethernet cable. The DHCP feature is enabled. I set the fallback IP address to 192.168.2.1 and the mask to 255.255.255.0. After DHCP fails I cannot telnet into or ping the board. If I disable DHCP however, it works fine. ANyone know why this is happening?

-Fred