Ok, let's stop the madness.
Rule # 1 Look at the routing tables. (show ip route)
Do the routing tables show all routes and one
leading to the 1720 router address?
If you are using RIP and managed to stay inside the classful boundaries you won't need a gateway of last resort. (This isn't to say it is not good idea to have one, it is ALWAYS a good idea to have one). Let me cover Classful Boundaries (because RIP uses Classful Boundaries)a small bit.
Say On router1 you are using ip address 10.30.1.1/16 on the serial0 interface. On Router2 serial0 interface (connecting to router1) you have 10.30.1.2/16 , however, on serial1 of router2 you have 172.16.1.12/16. You are now running into problems, you just went outside the Calssful boundary of 10.30.0.0/16 routing updates to and from 172 route are going to need help, this is where Gateway of last resort and static route maps help.
You most likely have a classful boundary showing all your possible routes. But like I said check and see what a show ip route will give you from your Router2?
If you have all routes showing and can ping the 1720 intranet side of the network then you know you have a clean access to this point and all problems are starting (or ending to be funny) with the 1720.
You said you have a the 1720 performing NAT, I would be willing to bet money that the new group of users from Router2 aren't set-up with an address pool to be translated out of the 1720.