Hi John and welcome to Digi forum.
That should work in Port Isolated mode. Have you rebooted the unit after put them in Port Isolated so that the change is applied?
If you put back to HUB, does it works?
Is there a switch between the ETH1 port and the DHCP server?
Without seeing the complete config and status as well as the firmware version running, Is not easy to understand what is happening. So, I would suggest you to open a case sending an email to firstname.lastname@example.org so we can properly troubleshoot. Please include a backup file from the unit (Administration > Backup/Restore) being sure to include the debug.txt file in it. Also, please provide the IMEI of the router for warranty check.
Please also see here for details on Digi Support levels: https://www.digi.com/support
Digi Technical Support Team