[Mark McLeod]

I was able to replicate both working (attachment 2) and non-working (see attachment 1) cases.

The Sim seems to be unhappy if the IP is changed after it starts.
I'll play with variations, but it behaves whether DHCP or 10.te.am.9 is used as long as it isn't changed

P.S.
The Sim is unhappy only if it is the DS that changes the IP, and here's the interesting part, even if the DS is started before the Sim, so it's really the DS that's unaccommodating.
I can change it by hand and the Sim will still work.
If the DS does change the IP, then just restarting the DS worked for me.

In my tests LV was started first and has been running the whole time. I just played with starting and stopping the Sim and DS. I also disabled all NICs except for the wireless to somewhat replicate your setup.