Shared Internet Connection not working between G3 iMacs

Trying to share an AirPort connection on iMac 1 over ethernet to iMac 2.
iMac 1 is a 400 MHz iMac G3 running OS 10.2.8. It has AirPort and I set the Sharing-Internet pane to share its AirPort connection over Ethernet. The Firewall is off.
iMac 2 is connected to iMac 1 via crossover cable. It's a 500 MHz G3 running OS 10.3.9.
AirPort base station is set to Pass-through for IP addresses, and is connected via the WAN port to a D-Link Dl604 router's LAN port; the router connects to a cable modem via ethernet from its WAN port. The network consists of about 11 Macs and 3 PCs. 4 of the Macs connect by AirPort and 6 plus the PCs connect by ethernet, leaving the odd man out, the iMac 500. I don't use the network to share info between machines, just to allow all to access the internet
In the Network preference pane on # 2, I have a green light for ethernet -- but it isn't being fed the right info in TCP/IP ... the router info is not the IP of # 1 nor is it the IP of my Router or of my AirPort base station -- I have no idea what it's from but it looks like it's self-assigned. The Router address of #2 is 192.168.2.1, and the supposed network address of #2 is 192.168.2.4.
So, iMac 2 won't connect to the Internet. If I unplug the ethernet cable, the TCP/IP info on #2 disappears, but the same info reappears as soon as I reconnect the crossover cable. I have rebooted the machines to no avail.
Now, I also tried a direct connection from #2 to my router in another room (conventional ethernet cable) and #2 had no problem getting online.
I also tried #2 connected to my Dual G4 (running 10.3.9) in a third room, with the G4 sharing its AirPort connection over Ethernet - result is the same as when connected to #1 -- green light, no internet connection, and a wonky router address. To top it off I run Remote Desktop 2.2 from the Dual G4 and it can't see #2 even when the supposed network address on #2 is entered into ARD manually.
The only thing that's right is the subnet mask.
Any ideas? I've done this with other Macs and never had an issue til now. I even started over and reinstalled OS 10.3.9 on the iMac 500, to no avail.
Is there a cache file or plist file somewhere I need to trash? Too bad there is no way to manually "reboot" TCP/IP. I did try the Internet Setup Assistant, and it told me I would have to enter a manual address. I don't get it -- it's fine with a direct connection, but not through a shared connection....

Solved!
I forgot about permissions and disk repair in Disk Utility. After doing this, the tethering is working again.

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