Does level adjustment simply mean the character must be the adjustment's number of levels lower than the rest of the party, or does it act as levels in the relevant template and include the relevant number of hit dice and/or skill points?
[RPG] How exactly does a level adjustment work
character-creationcharacter-levelsdnd-3.5e
Related Solutions
You advance 2d8 hit dice because the template says:
A lycanthrope adds the Hit Dice of its animal form to its base Hit Dice for race, level, and class. These additional Hit Dice modify the lycanthrope’s base attack bonus and base saving throw bonuses accordingly.
Every creature type works somewhat like a class: you now have two extra levels of animal, not monk.
The level adjustment (LA) is a measure of how much more powerful the template makes you. If I make a 5th level fighter who is an aasimar, then the LA of +1 means that I am supposedly as powerful as a 6th level character. I don't get any HD or levels from the adjustment; it just indicates the extra edge my race gives me. This is on top of any racial HD.
Neither the animal HD nor the LA improve your monk abilities. Gaining the template mid-game complicates matters. You really have to consult your DM about how to handle it -- one way would be to say that you don't level up again until your XP matches your extra power. (You have gained about 4 levels worth of power; two levels of animal and the LA +2 from the afflicted werewolf template.)
As Oblivious Sage pointed out in the comments, according to the official rules, no, you do not get any extra HD for getting a template. When you gain the template:
Hit Dice: Increase all current and future Hit Dice to d12s.
However, you do not gain any extra hit die. What you are doing here is acquiring the template bit by bit, but since there is nothing in the template to give you HD, you dont get any.
There is a reason why base creatures usually need at least 5 HD.
However, let us think beyond the mechanical ruleplaying. I am pretty sure your DM knows that a level 9 character with 12 hp would be unplayable. If so, why does he still say that you don't gain any extra HP after lvl 1? Either, he is the type of gamer to love rules above all, or, he doesn't really want you to play a vampire in his game. There is also the possibility that the DM simply trusts WotC to know their product, and to have chosen LAs fairly (Thanks, KRyan). Or, the DM is running a story-centric or social game where fighting ability balance is not important (credits to SSD). Either way, ask him about it, metagame.
If it's because your fighting ability balance doesn't matter, then you are set to go, knowing that you will only get 12 hp. If he doesnt want you playing vampires in his game, that is his call, and you will need to respect that. If he is okay with you playing one combatly, then you need to work together to make it playable, probably with a homebrew solution. Gaining d12 every level would be over the top, making it annoying to other players, however some HD progression is needed. One possibility would be to lenghten the process of acquiring vampire template by adding your class levels (and therefore gaining HD) in between your template levels. However, I am not sure of your intentions and the playability of such a build, so that might not be the what you are looking for. The other possibility is just houseruling HD progression into the template, but make sure its either not every level/not d12, and in any case, this will and should lenghten the process of acquiring the whole template.
That is why, and once again credits to Oblivious Sage, it is usually a bad idea to take Templates with high LA. I would like to point out that it may not be such a bad idea to use different PC creatures, since those usually already start with some HD. However, I do understand that your desire to play a vampire is not a quest for powergaming opportunity, so just talk to your DM and try to make your character playable.
If you took a bard level every second level, alternating between vampire levels and class levels, at 9 level you would have 5d12 hp, that is average 38 (+your con modifier x5), and you would have 5 vampire levels to go. A 9 lvl bard has an average of 34 hp, which would make you pretty balanced. That way, at ECL 16, you would be a fully vampiric lvl 8 bard, with roughly appropriate hp, and a wide array of abilities at your disposal.
Hope this helps.
Best Answer
Level Adjustment does not convey any hit dice alone, it simply adds to the effective level of a character.
Effectively, your first option is correct in that this character will be 2 class levels behind other party members.
For example a level 1 Drow Rogue would only have a single hit die and only the class abilities of a level 1 rogue, but would count as a level 3 character and thus would need a total of 6000 xp (the amount to reach level 4) to become a level 2 rogue.
Note that some "monsterous" races may convey racial hit dice as well as possess a level adjustment. For instance a Gnoll provides 2 Racial humanoid hit dice as well as a +1 LA. Thus a level 1 Gnoll Rogue would have the abilities of a level 1 rogue, 1 rogue hit die, 2 humanoid hit dice, and the +1 LA. This character would count as level 4, but having 3 hit dice would have 2 feats (one for level 1, one for level 3).