Hmm. Some gotchas to work out:

You will need to tell the NAT box how to route packets to and from the 172.20.2.0 network. I'm guessing that pppd sets up a host route for machine that dials into it, ie 172.20.2.5, but not a network route.
You will need to ensure that packets from the 172.20.2.0 network get NATed when going out to the internet.
You will need to ensure that the new gateway has routes for the new internal network (172.20.2.0) pointing to the internal ethernet card, and a default pointing to the NAT box.