Your basic problem is that you cannot use the Belkin as a router by connecting both Internet and devices to its LAN ports. It will behave as a network switch, not as a router, and only one connected device will have internet access. The fact that its DHCP server is still running and allocating 192.168.2.x addresses will mess things up even further.
Had you been using a Cable/DSL Router, which has an RJ45 ethernet port for its WAN (Internet) connection, this should work. Your WAN port is a telephone connection and the Modem and Router sections cannot be separated to allow you to use it as a stand-alone router.