Glad to hear that the BVI change allows you to see the router from your LAN now.
It looks like you took out your access-list 1, which is needed for NAT. My guess is that is why you can now ping the router but not access the internet in any form from your clients.
Try re-adding the...
Actually, you should be able to ping the 192.168.77.1 interface from your clients as there is not any incoming access lists/inspects on the VLAN 1 interface. Since they are on the same subnet and vlan, and plugged in directly (client-->877w) you should able to pass icmp packets (ping).
I don't...
Additionally, when you say they can't get out to the internet, do you mean they can't pull up webpages, or does even ping not work when given the IP address 4.2.2.2?
First things first, how are your clients connected to the router (wireless/wired)? Can they ping the router, and do they have the router set as the gateway? Also, can you please tell us what the client computers subnet information is?
I only ask because it doesn't appear as if DHCP is being...