Ok, I got it working. I went to mandrake control panel and ran configuration wizard. Set eth0 to auto IP/dhcp (this is connected to cable modem) set eth1 to static IP 192.168.0.1/255.255.255.0. Set gateway address to 192.168.0.1 gateway device to eth0. Then went to ICS wizard expert mode and set Local Network address to 192.168.0.0/255.255.255.0, DHCP server and DNS server to 192.168.0.1, and left everything else default.
I hope this helps anyone else out there with this problem. I can't believe I screwed this up to begin with.