Lion 10.7.2 VPN service not working

Hi,
I have a clean installation of 10.7.2 on a Mac Pro which is not able to provide VPN service. Here's what is configured:
*OD Master - users and groups in place
*firewall active with allow rules for all necessary VPN ports (500, 1701, 4500)
*port forwarding on router to server IP address of 500, 1701 and 4500
*pre-shared key in place
*VPN server turned on
I spent over an hour on the phone with Apple Enterprise Support and they finally conceded "the engineers have informed us that there is a bug with the VPN service and that it is being looked at currently. It will hopefully be addressed in the pending OS update."
Steps to reproduce:
1. client is configured with approprate IP address, username, password and PSK
2. client attempts to connect
3. server's VPN log which should be in /var/log/ppp/vpnd.log is not populating with any new data, but the top-level "all messages" in console is showing a slew of information. Here is what is displaying:
12/4/11 8:42:41.340 PM          racoon          Connecting.
12/4/11 8:42:41.340 PM          racoon          IPSec Phase1 started (Initiated by peer).
12/4/11 8:42:41.340 PM          racoon          IKE Packet: receive success. (Responder, Main-Mode message 1).
12/4/11 8:42:41.341 PM          racoon          IKE Packet: transmit success. (Responder, Main-Mode message 2).
12/4/11 8:42:41.400 PM          racoon          IKE Packet: receive success. (Responder, Main-Mode message 3).
12/4/11 8:42:41.423 PM          racoon          IKE Packet: transmit success. (Responder, Main-Mode message 4).
12/4/11 8:42:44.297 PM          racoon          IKE Packet: transmit success. (Phase1 Retransmit).
12/4/11 8:42:47.300 PM          racoon          IKE Packet: transmit success. (Phase1 Retransmit).
12/4/11 8:42:50.303 PM          racoon          IKE Packet: transmit success. (Phase1 Retransmit).
12/4/11 8:43:02.316 PM          racoon          IKE Packet: transmit success. (Phase1 Retransmit).
12/4/11 8:43:17.332 PM          racoon          IKE Packet: transmit success. (Phase1 Retransmit).
12/4/11 8:43:35.350 PM          racoon          IKE Packet: transmit success. (Phase1 Retransmit).
12/4/11 8:43:56.373 PM          racoon          IKE Packet: transmit success. (Phase1 Retransmit).
12/4/11 8:44:20.399 PM          racoon          IKE Packet: transmit success. (Phase1 Retransmit).
12/4/11 8:44:47.428 PM          racoon          IKE Packet: transmit success. (Phase1 Retransmit).
All that is displaying in the /var/log/ppp/vpnd.log is:
2011-12-04 19:39:29 EST          Loading plugin /System/Library/Extensions/L2TP.ppp
2011-12-04 19:39:29 EST          Listening for connections...
2011-12-04 19:49:36 EST          terminating on signal 15
#End-Date: 2011-12-04 19:49:36 EST
#Start-Date: 2011-12-04 19:49:38 EST
#Fields: date time s-comment
2011-12-04 19:49:38 EST          Loading plugin /System/Library/Extensions/L2TP.ppp
2011-12-04 19:49:38 EST          Listening for connections...
2011-12-04 20:04:13 EST          terminating on signal 15
#End-Date: 2011-12-04 20:04:13 EST
#Start-Date: 2011-12-04 20:04:30 EST
#Fields: date time s-comment
2011-12-04 20:04:30 EST          Loading plugin /System/Library/Extensions/L2TP.ppp
2011-12-04 20:04:30 EST          Listening for connections...
I am hoping that this comes down to a bad port forwarding issue. Does anything seen in the above logs indicate that to you?
What would my next step be for trying to repair the VPN service? I want to avoid a reinstall if possible.
Thanks
Pete

Ok, so, the best FIRST test is to try from the local lan, same lan as the Lion server. L2TP works fine for me, PPTP definitely has a bug. You can configure the VPN connection in your network system preferences on the client machine. Just put in your local server IP.
The idea here is to first make sure VPN works on the LAN (which is useless of course but great for troubleshooting), once it does, THEN you can go to the next step and troubleshoot the remote connection.

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