How are you trying to ping locally? Are you using a computer name, or using the ip. If your not using the ip, try it (don't think it will make a difference, but try).
What does 'can't ping' mean??? Do you get request timed out, no route to host, unkown host, or some other response to your ping? All of the responses indicate a different problem.
From the information available so far, it sounds to me like all of your problems are related to routing, but that is a somewhat educated guess.
Open a command prompt and type 'route print'. The last line should print 'Default Gateway'. Is the ip following that your isp's gateway? If not, that is why you can't browse the internet. You should also have one pointing to the server side network of your VPN. If the subnet on the client side is the same as the subnet on the server side, it could cause your local connection problem. All of your local traffic is trying to hit the other side of the VPN. To verify this, in a command window type 'tracert', a space, and the ip address of one of your local machines. If you see it try to hit the VPN server, that's your problem. You will either have to add a specific route to each of your local machines, or change the subnet on one side of the VPN.
Lot to take in at once. If you need more help, or if I have guessed wrong, report back and we can try again. Be sure to include as many details as you can, including the ping and tracert responses, and your client OS as well.
