I seem to remember having a problem with a PPPOE adsl connection and it didn't work properly until I adjusted the MTU... because there was an MTU size problem a few packets actually would make it through if they were small enough, but most everything would be fragmented and then (for whatever reason) dropped.
If I get access to that host again in the next week or so I'll get the working configuration for it and my notes.
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Network Firefighter
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