PC fails to connect to network

I run a 50 PC NT4 network with some of the workstations connecting thru a workgroup. A new Dell 2400 using XP Home was connected a month ago and worked fine until this week. Then it failed to connect with a ‘failed to resolve DNS for host’ message. I checked cabling and hubs all ok. I can ping 127.0.0.1 but any other IP is unreachable. Ipconfig shows that its using 169.254.181.112 with Subnet 255.255.0.0 and no gateway. /renew gives ‘unable to contact your DHCP server’ after timeout.
I reinstalled the NIC drivers as well and I think thats about everything I’ve tried!

Any ideas?
Delboy