Your interface configuration should not have ip address dhcp.
PPPOE config template
interface FastEthernet4
description WAN Interface (Dialer0 attached)
no ip address
no ip redirects
no ip unreachables
no ip proxy-arp
ip route-cache flow
duplex auto
speed auto
pppoe enable group global
pppoe-client dial-pool-number 1
!
interface Dialer0
description Pseudo PPPoE Interface
ip address negotiated
! ** outside (WAN) interface for NAT **
ip nat outside
no ip redirects
ip mtu 1452
encapsulation ppp
dialer pool 1
!** bind the interface to the fastethernet port
! ** Apply IP traffic to the dialer0 interface **
dialer-group 1
no cdp enable
! ** My ISP uses PAP. Yours might use CHAP **
ppp authentication chap pap callin
ppp chap hostname <username>
ppp chap password <password>
ppp pap sent-username <username> password <password>
!
! ** Describe what traffic is interesting enough to
! ** force your PPPoE connection open
dialer-list 1 protocol ip permit
access-list 1 permit 192.168.1.0 0.0.0.255
!
ip route 0.0.0.0 0.0.0.0 dialer0
!** if the ip address is statically assigned then t he next hop will be the default gateway.
! ** configure nat on Dialer0 using its IP address (PAT) **
ip nat inside source list 1 interface Dialer0 overload
