Just to offer that I saw a similar issue...
I bought my DNS-323 used.. and upon arrival it seemed dead... and behaving as you said. All would light up, and I would also see a "link status" light on my switch indicating the ethernet connection came up... but the DNS would never get a DHCP address, and after a minute, would drop the network connection, and the "link status" on the switch would go dark.
As with yours, a paperclip reset on the DNS 323 did the trick.