I'm passing this on for my boss.  It has to do with does Qwest do address translation on their DSL accounts with MSN ISP.  If anyone here has any info it would be a help.
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Do the new MSN DSL "modems" do NAT translation, or are they real routers?

If MSN is selling NAT'd internet, there is a good chance that it will not work with a VPN of any kind, unless the routers support "VPN Passthrough". This concurs with what the logs seem to indicate (the VPN tunnel is brought up, but GRE traffic does not get passed).