smnirosh
Maybe restart your WAP
You should check the admin configuration of your WAP, & turn off all functionality except the wireless function.
Dumb it right down.
Enter a fixed IP in the WAP device that is out of the DHCP range of the SME server, or otherwise configure specific fixed IPs for each device in the Hostnames panel of SME server that match specific mac addresses on each piece of connected equipment. Thes "forced allocation IPs" will be issued out by the SME server DHCP server.
What you are doing works for me, so just a matter of getting your settings correct/appropriate.