Correct me if I am wrong, but I don't think that BT router thing is a switch.
LMCE _IS_ a router; what you are aiming to do is plug your Internet directly into the core, and let it handle all the DHCP witchcraft and firewall settings etc. The only thing between my core and the wall is a simple cable modem - cable in, Ethernet out (and this Ethernet cable goes straight to eth0 on my core). And of course, the second NIC/network card in the core connects to your internal network, which is where you would put your D-Link switches.
You might be in a situation where that BT router has it's modem built in - are you using DSL for example? If this is the case, I would have thought (although I have no experience of this, so please correct me if I am wrong somebody) that DHCP would need to be disabled and you'd have to set up a static IP or something for eth0 on the core.
Whatever the method, before you start with the DVD installation, start with everything off. Then, switch things on one by one, in order (starting from the wall), waiting 30 seconds between each.
Did you burn the DVD on its slowest speed?