Win98 Connecting to a Win2000 & Win2003 Domain

Here's a scenario I would welcome feedback on.

Two Windows 2000 advanced servers, two 2003 enterprise servers, 250 XP
workstations, 40 Windows 98 workstations. 1600 users (school pupils), XP
workstations log on fine every time. Windows 98 workstations are behaving
strangely with the following symptoms:-

Windows logon appears before network logon
Windows 98 users cannot login (no domain controller was available) or
(denied access). If a user tries 3 or 4 times they will eventually suceed in
logging on.
Even when login fails we can ping the servers.
DNS, WINS is configured


We have setup our network as follows:

Servers are addressed 192.168.2.x mask 255.255.255.0
clients are addressed 192.168.roomnumber.station mask 255.255.255.0
each client has a route add 192.168.2.0 192.168.roomnumber.station mask
255.255.255.0 which is in the run section of the registry.

I have captured network traffic from a test 98 station in search of insight
to this problem, and I have observered the following:

Successful logon: Client sends logon request, server acknowledges logon
request

Failed logon: Client sends router solicitation request x 2
Client send DNS registration request x2
Client sends logon request
Server does not acknowledge

Can anyone shed any light on this? It does appear that if I place the 98
clients on the same subnet as the servers this problem does not occur (ie
it's a routing issue?). However we have had this configuration for over a
year and it has previously worked, what's changed? we moved from a mixed
Novell / Windows network to a Windows network (domain). So our clients no
longer has Client32 installed.

I have checked the event logs on the server and can find nothing of
relevance.

The easy thing to do is to put the Windows 98 workstations on the same
subnet as the servers, but I would like to understand the problem and come
up with a resolution of sorts

Click Start, point to Settings, click Control Panel, and
then double-click Network.
On the Access Control tab, click Share Level Access
Control.
On the Identification tab, change the machine name if
necessary, and change the Workgroup field to match the
name of the new domain or workgroup the client is joining.
On the Configuration tab, you can remove Client for
Microsoft Networks if this computer is not going to be
part of a new Windows network or if it is not required to
log on to a Windows network.
If this computer is joining a new domain or workgroup,
view the properties of the Client for Microsoft Networks.
If you are logging on to a domain, make sure that option
is selected.
Fill in the Windows NT Domain field with the name of the
new Windows NT domain you are joining, click OK, and then
click OK.
You may be prompted for your Windows 95/98 installation
media.
Restart the computer when you are prompted to do so.