We've been having a lot of trouble with getting our kids to adjust to DLS. We were just going witht the flow but the last few nights we decided it just wasn't working (same as you, tired/grumpy kids, up late and not settling) so we have just gone straight back their 7.30pm bedtime. DD is allowed to sit in bed and read for a bit long but she must be in bed at 7.30. It seems to be working as she is settling better each night and and starting to wake up earlier too (she was waking 8 - 8.30am).
Best of luck darl.