Winproxy behind router

I've recently set up Winproxy on a small network for a client of mine
because they were looking for an inexpensive solution to control
Internet access. Currently have it set up on a machine using two nic
cards as required. Both internal and external nic cards are actually
connected the LAN side of a Linksys hub/router and the DSL modem is of
course going into the WAN side of the router. The reason I did not
connect the external nic directly to the DSL modem as would be
normally done with a proxy is that we have a couple of machines that
we want to bypass the proxy server and go direct. Now the Linksys
router is handling DHCP for the entire network so I disabled Winproxys
DHCP server.
Here are the settings of everything:

Proxy Server Internal Card (Connected to LAN port on Linksys router)
IP:192.168.1.15
SM: 255.255.255.0
No gateway assigned
PDNS: 192.168.1.103
SDNS: 192.168.1.1

Proxy Server External Card (Connected to LAN port on Linksys router)
IP: 192.168.1.16
SM: 255.255.255.0
GW: 192.168.1.1
PDNS: 192.168.1.1
SDNS: 192.168.1.1

Client cards:
IP: 192.168.1.100
SM: 255.255.255.0
GW: 192.168.1.15
PDNS: 192.168.1.103
SDNS: 192.168.1.1

Set up the way I have it now it seems to be causing a problem where
the proxy machine cannot see the network. Cannot access or even ping
any IP's on the network at all and yet the network clients have no
problem seeing and pinging proxy server. I suspect this may be related
to both the proxy servers NIC's both being on the same subnet which is
normally not correct when setting up a Winproxy machine. Since both
NIC's of the proxy server are connected to the same router and thus on
the same subnet can I still change the IP of the external card to a
different subnet such as 192.168.2.16 even though its connected to the
same subnet as as the internal card. The external card only needs to
grab internet access for Winproxy from the router. It does not need to
see the network for anything else. Thats the job of the internal card.

Thanks in advance,
Adam