Any suggestion other than using old router as a repeater
raspberry pi?
http://www.raspberrypi.org/You would have to find a way to connect a wireless module, so it's impractical but demonstrates the value of re-using technology. Old Linksys router and DD-WRT is the ideal solution. Low overhead and all the work is done for you.
If I was going to do this w/o a router I would setup a Linux box with two wireless NIC and then bridge the interfaces(one for mainline and second for broadcast) . I did this with a FreeBSD box but it was a broadcast station. I bridged the wireless and ethernet interfaces and then hooked it up to the modem. It worked, but setting up the firewall proved difficult(I think it had something to do with bridging the interfaces); you have to define routes, dhcp, etc..
Anyways, I think linux will prove much more friendly if you choose to use it as a platform for your DIY Router.