Don't understand what you meant with can't assign ip to server?

Replace this
Observer Mode: -sv -cl -ip 192.168.1.56 -port 2332 -pl TheObserver
Server Mode: sv -ip 192.168.1.56 -port 2332

With this?
Observer Mode: -sv -cl -port 2332 -pl TheObserver
Server Mode: sv -ip -port 2332

The client must input the ISP assigned ip of the connection used by the server otherwise he or she would stay on his her own LAN until time-out.