@RussellA:
Also, the Status Interfaces not showing DNS settings on OPT1 (or WAN2 depending how you've labelled it) is a red herring. Even with a working DNS service when the WAN is down, the status page only lists DNS settings on the WAN Interface section and not the OPT1/WAN2 section.
A few things I found which weren't in the instructions which eventually allowed DNS service to work when WAN was down:
1. On System->General Setup page uncheck the option DNS Server Overrride.
2. Also On System->General Setup page check the option Disable DNS Forwarder (See Note 1 below).
3. On Services->DNS Resolver page check the option Enable (This should be checked already because of step 2).
4. Also on Services->DNS Resolver page check the option DNS Query Forwarding (See Note 2 below).
I tried this, it works for the internet, but the NAT stopped working. I have a NAT that goes to OPT1, and I have set the firewall rules manually to set that gateway.