Firewall/NAT

I'm trying to setup something similar to this:
http://img33.picoodle.com/img/img33/9/9/24/f_Drawing1m_0d0f4cd.jpg

Basically I want it to hit the web if it needs it, otherwise send it out the Internal WAN to a different site.  We have full DNS/DHCP internally, so if I can get it to use that as well, it would be a bonus. 

Basically I just want to use m0n0wall as a filter on the LAN traffic.  Can I do that?  Would I need to add a 3rd card for a combo LAN in/WAN out/LAN out setup and use some funky filtering?

Will it blend?

Ok, just an update

I setup a box for a m0n0wall and setup static routing for the local addresses.  That all works great, provided it's IP based.  Is there a way for it to use a different DNS for local addresses vs the internet DNS, as thats the only thing that's not working.

Configure the forwarder to send queries for your internal domains to internal servers.