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There is something definitely wrong here... and all things point to the router. Have you tried resetting the router (not just unplugging but hitting a reset button/performing the ritual that the manual says to reset the router)? It sounds like something somehow corrupted the router's configuration and a (hardware)reset may be able to fix it.
I'm guessing by your description that the router itself doesn't seem to be broken but is performing more like a hub then a router.
As long as the computers are set to DHCP, I'm not sure there is any other problems with the computers themselves.
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