Problems using MBP as WiFi router for iPad2 (self-assigned IP address)

H/W& S/W:
MBP 15" (model early 2011), running Snow Leopard,
iPad 2 WiFi only, 64Gb, iOS 4.3.4 (8K2).
Scenario:
I am in a location where there is no WiFi. MBP is connected via Ethernet to a DSL network, and has access to the Internet. I turn on Internet sharing, having set the following:
"Share your connection from" set to "Ethernet" and
"Share computers using Airport" ticked.
Previously, I have then connected the iPad 2 via WiFi with the WiFi network created on the MBP, and succesfully worked from the iPad on the Internet (email, browsing, app downloads, ...).
Problem:
Now, however, the iPad connects to the MBP's WiFi network, but when I attempt to access the Internet, I get such messages on the iPad  as "Safari is not connected to the Internet" or "Cannot Get Mail ...".
On investigation, I see that Airport on the MBP is in a YELLOW status: Status On, with the note "Airport has the self-assigned IP address 169.X.y.z, and will not be able to connect to the Internet".
On the iPad, the WiFi network shows the IP address 169.X.a.b (with a subnet mask (255.255.0.0).
I have tried:
1. turning Airport off and on
2. renewing the DHCP lease on the MBP
2. configuring IPv4 address in the MBP manually
3. configuring the IP address manually on the iPad (not expecting anything with this, but ....)
4. fixed Permissions" on the MBP disk (suggested on another support community web site)
But none of these make any difference.
Message was edited by: WKH
forgot to mention: Firewall is disabled on the MBP.

Hello,
I've had the exact same problem on my macbook and it really **** me off ! I tried all of the solutions written in this forum and none worked for me ! I was really starting get mad especially that my macbook is quite new...
And the thing is i have no Apple Store where i live which is a pretty F***g problem so I had to wait for vacations to go to france where I took my macbook for check at the apple store...
I just came back right now and my wifi works till now a least far much better than before...The guy was really nice he checked everything and he tried all the solutions on this forum too..Finally he tried to boot from one of '' apple's '' usb that has suberb booting systems...And it worked so finally he re-installed 10.6.5 as it was '' corrupted '' with wifi bugs ! For that he needed to delete everything on my macbook ! GREAT !
After 15 minutes the installation was done and it started like when you buy a new macbook !
And VOILA the Wifi came back to normal !
Hope this helps...
If you have this problem go and see Apple Store or re-install yourself 10.6.5 !
Thanks !

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