Peer to Peer Networking

On a peer to peer network using win2k and win98 machines winipcfg.exe is showing 169.254.x.x
subnet mask 255.255.0.0 as the address on one of my win98 machines. I have tried to release and renew the settings without success. I removed the adapter from the network neighborhood, had the machine detect the NIC, reloaded the NIC driver and solved nothing. I have a SMC firewall installed and it is configured to perform the DHCP function. Both the SMC router and the NIC on the machine in question show an active link. I know the subnet mask & IP are wrong but I’m unable to resolve the problem. HELP!