Wireless card configured, can't ping router

[Chief_Wiggum]

Strage problem here. I'm running Knoppix 5.1.1, booting from CD. I have a Ralink RT2561/RT61 based wireless PCI card. I can get everything setup correctly, ndiwrapper module loaded, but I can't ping the router. I can see the wireless card connect from the router, I get lights flashing on the card when I try and ping, but no response. It's almost like the Knoppix box is firewalled or something. I've tried turning encryption off with the same results. Also tried the same setup using Damn Small Linux with the same problem.

Anyone have idea idea what's going on? I'm hope I'm just missing something simple here. Any help would be greatly appreciated. Info dump below...

Router is at 192.168.1.1

lspci:
02:09.0 Network controller: RaLink RT2561/RT61 802.11g PCI

lspci -n:
02:09.0 0280: 1814:0301

ndiswrapper -l:
rt61 : driver installed
device (1814:0301) present (alternate driver: rt61pci)

dmesg:
ndiswrapper version 1.32 loaded (preempt=yes,smp=yes)
ndiswrapper: driver rt61 (Ralink Technology, Inc.,10/27/2005, 1.00.03.0000) loaded
ACPI: PCI Interrupt 0000:02:09.0[A] -> Link [APC4] -> GSI 19 (level, low) -> IRQ 20
ndiswrapper (ExAllocatePoolWithTag:1009): Windows driver allocating 383552 bytes in interrupt context: 0, 0, 0
ndiswrapper: using IRQ 20
wlan0: ethernet device 00:14:85:d4:68:90 using serialized NDIS driver: rt61, version: 0x0, NDIS version: 0x500, vendor: 'IEEE 802.11g Wireless Card.', 1814:0301.5.conf
wlan0: encryption modes supported: WEP; TKIP with WPA, WPA2, WPA2PSK; AES/CCMP with WPA, WPA2, WPA2PSK
usbcore: registered new interface driver ndiswrapper
wlan0: no IPv6 routers present

lsmod:
ndiswrapper 185812 0
usbcore 135812 10 ndiswrapper,ftdi_sio,usbserial,usb_storage,usbhid, libusual,ohci_hcd,uhci_hcd,ehci_hcd

iwlist wlan0 scan:
wlan0 Scan completed :
Cell 01 - Address: 00:40:10:10:00:03
ESSID:"xxx"
Protocol:IEEE 802.11g
Mode:Managed
Frequency:2.447 GHz (Channel 8)
Quality:76/100 Signal level:-47 dBm Noise level:-96 dBm
Encryption key:on
Bit Rates:1 Mb/s; 2 Mb/s; 5.5 Mb/s; 11 Mb/s; 18 Mb/s
24 Mb/s; 36 Mb/s; 54 Mb/s; 6 Mb/s; 9 Mb/s
12 Mb/s; 48 Mb/s
Extra:bcn_int=100
Extra:atim=0

iwconfig wlan0:
wlan0 IEEE 802.11g ESSID:"xxx"
Mode:Managed Frequency:2.447 GHz Access Point: 00:40:10:10:00:03
Bit Rate=54 Mb/s Tx-Power:20 dBm Sensitivity=-121 dBm
RTS thr=2347 B Fragment thr=2346 B
Encryption key:xxx Security mode:restricted
Power Management:off
Link Quality:76/100 Signal level:-47 dBm Noise level:-96 dBm
Rx invalid nwid:0 Rx invalid crypt:0 Rx invalid frag:0
Tx excessive retries:0 Invalid misc:0 Missed beacon:0

ifconfig:
wlan0 Link encap:Ethernet HWaddr 00:14:85:D4:68:90
inet addr:192.168.1.102 Bcast:192.168.1.255 Mask:255.255.255.0
BROADCAST MULTICAST MTU:1500 Metric:1
RX packets:1 errors:0 dropped:0 overruns:0 frame:0
TX packets:4 errors:0 dropped:3 overruns:0 carrier:0
collisions:0 txqueuelen:1000
RX bytes:249 (249.0 b) TX bytes:824 (824.0 b)
Interrupt:20 Memory:fdff8000-fe000000

route:
Kernel IP routing table
Destination Gateway Genmask Flags Metric Ref Use Iface
192.168.1.0 * 255.255.255.0 U 0 0 0 wlan0
default 192.168.1.1 0.0.0.0 UG 0 0 0 wlan0

ping 192.168.1.1:
PING 192.168.1.1 (192.168.1.1) 56(84) bytes of data.
From 192.168.1.102 icmp_seq=2 Destination Host Unreachable
From 192.168.1.102 icmp_seq=3 Destination Host Unreachable
From 192.168.1.102 icmp_seq=4 Destination Host Unreachable

--- 192.168.1.1 ping statistics ---
4 packets transmitted, 0 received, +3 errors, 100% packet loss, time 3000ms