Trouble Connecting a Router to a Router

To get an extra port to the cable modem, I tried hooking up an unused DSL Modem/Router, but this caused one PC to lose internet connection.

The ORIGINAL LAN diagram (Figure 1) shows our working home configuration. The Trendnet router had 4 ports, all being used. We had a PS3 unit which we would swap in and out with another PC.

Then I found an unused DSL Router Modem - a Westell VersaLink Model 327W
           (actually, Model: D90-327W15-06 Rev.D)

I removed the telephone cord, and plugged it in (possibly using wrong ports and/or cables) as shown in Figure 2. All seemed to work for a few hours awhile with some intermittent problems.

Then the Windows 7 PC (on SWITCH1) reported that there was no internet connection. WV1 (Windows Vista), XP1, XP2 were all connected OK).

I removed the power from the Westell unit, and the Windows 7 PC regained connection almost immediately.

I was surprised that only the Windows 7 PC lost connection. Can the Westell DSL Router Modem be used essentially as a switch to give us the extra port that we need? Any idea why just one PC was affected by the configuration in Figure 2?

I can get a switch, but would think that I should be able to hook up the DSL unit to give us the extra port. All the cables in my home are of the same type.

=====================================

Here is a manual I found online for the Westell unit.
    http://westell.com/content/products/pdf/030_300444A.pdf

From the manual, it appears that the IP address is (192.168.1.1)
=====================================

Figure 1: ORIGINAL LAN
_____________
 Cable Modem
_____________
   ^
   |
Router-Gateway (192.168.0.1) Trendnet TWG-BRF114
  ^                     ^        ^       ^
  |                      |         |        |
-SWITCH1-     WV1    XP1    XP2
^     ^    ^    
|      |     |
XB  W7 XP3

All the cables I have are the same.

=====================================

Figure 2: ATTEMPTED TO ADD PS3 WITH ROUTER
_____________
 Cable Modem
_____________
   ^
   |
Router-Gateway (192.168.0.1)
  ^                    ^       ^          ^
  |                     |        |           |
-SWITCH1-    WV1   XP1    DSL_Router_Modem (DSL not used)
^      ^    ^                            ^        ^
 |      |     |                             |         |
XB  W7  XP3                        XP2     PS3

================================

Thanks for your assistance.