What can be done to troubleshoot OS X Wi-Fi self-assigning ip address of 169.xxxxxxxxx when other clients connect?
Two avenues can solve this problem:


Find and disable whatever firewall is intercepting the DHCP return traffic since your Mac needs to see what IP address the route is assigning it. When it doesn't get a response, eventually the DHCP request times out and your OS self-assignes an IP in 169 land.
Inspect the network traffic or the router logs to see if and why the Mac DHCP broadcast packet is being ignored. The router could be out of IP addresses, not allowing that MAC address or just an odd network condition is preventing the router from seeing the OS X request for a DHCP address.