Samsung Galaxy S - Problem obtaining IP address. "NAK in request"
DHCPNAK is a server message, it's invalid for clients to send it. Sorry I can't be more helpful, not familiar with that particular router. I would recommend turning off encryption (briefly!) and sniffing the dhcp handshake with e.g. Wireshark and look at what's really going on.

As an aside, DHCPNAK generally gets sent (by the server) when the client requests renewal of an invalid ip, to trigger the client requesting a new address. Check that you have a dhcp pool configured and that it has not been exceeded. Still shouldn't kick out that error, but something to check none the less.