Disclaimer - I do not own a SOHO. I do have other Peplink products and a decent understanding of network principles. If I am off base, someone please enlighten me.
Assumptions - your LAN is setup with your router at 192.168.1.1 and a subnet mask of 255.255.255.0.
You aren’t using the DHCP proxy option are you? If it is enabled, then the router is “capturing” any outbound DNS requests and trying to send them out to the WAN to a non-routeable IP. If you want to use a local DNS server, you should put 192.168.1.33 in your DHCP server settings for DNS server. You can use the router IP as the secondary DNS.
Any client that pulls a DHCP address from the router in the 192.168.1.0/24 network (assumption) will begin sending DNS requests to the local DNS server. The DNS settings on the WAN should point to DNS servers on the internet. You should at least try your ISPs DNS servers before jumping straight to google public DNS. Local ISPs often have more efficient paths to resources.
I would bet that you have a circular DNS loop created. An invalid DNS server configured on the WAN means that nothing (including your local DNS server) can get DNS requests to go anywhere useful. I would imagine your local DNS server was timing out and passing the timeout on to your clients (the one you had statically assigned an IP and DNS server). That, or your static IP on the local DNS isn’t inside the local LAN boundaries.
Give it a shot and post back what you find. You really shouldn’t have to put your local DNS server on the internet to get to it from your LAN. You lose any advantage to having a local DNS.