I know but I would like to use a /29 so that I don't have tons of unused hosts.
To be blunt, does it really matter? You already have the DHCP server disabled...... Lock down the wireless well, and a 'large' (253 spaces) address pool isn't that much of an issue.
There's also the possibility that the router's firmware just doesn't like (read: the engineers said "who's going to do this?
) the /29 subnet. Only way to tell for sure: try it as a /24 subnet.
As to your other issue: I can think of three simple things that'll cause the massive lost-packets problem - faulty NIC (swap with known-good), faulty/damaged LAN cable (swap with known-good), or faulty LAN port on router (move cable to another (known-good) port.)
Far more likely that it's hardware, than it is Windows.