Thank you for the replies! So I ended up finding the issue but not the remedy. So the fault light appears when the subnet mask is changed from 255.255.255.0 to 255.255.254.0.
I was able to change the ip address to a different subnet which answers my first question, but still no success with the subnet mask.
@photovoltaic if you would like to give that a try and let me know if you get the same results.
I am going to look in further detail why the eip card does not like changing to a different subnet mask.
I do need it on this mask in order to integrate it to the network.
Basically why I was getting faulty results from changing the subnet was because i was also changing the subnet mask. So when I left the subnet mask alone(255.255.255.0) I was able to change the ip subnet to whatever desired.
Found on a manual: