Simple word but complex.
You are running Active Directory. For AD to work it requires the MS DNS server. Your workstation, as they should be, point to it for name resolution. When it is down you can't get to yahoo.com.
When the server is down you should be able to go to yahoo by typing in 126.96.36.199 which is yahoo's ip. You just don't have name resolution for the internet without going thru the ms dns server due to it being down.
drawback is if you change the workstations to the isps dns servers they won't logon/find the domain.