OSPF downward bit in MPLS network

Hi all,
I have an issue with using the OSPF downward bit and hope someone has seen this before.  It appears to do nothing in this example to prevent routes being learnt via the wrong path.  That is via a backup router that has learnt the route from the site primary router which has received the OSPF route originally redistibuted into OSPF from the PE (with downward bit set).
The docco says:
"The down bit is used between the PE-routers to indicate which routes were inserted into the OSPF topology database from the MPLS VPN super-backbone and thus shall not be redistributed back in the MPLS VPN super-backbone. The PE-router that redistributes the MP-BGP route as OSPF route into the OSPF topology database sets the down bit. Other PE-routers use the down bit to prevent this route from being redistributed back into MP-BGP. "
Therefore I would not expect a route received with the downward bit set to be installed into the route table nor BGP table however the below shows it is?  This has essentially created a routing scenario where core routes are learnt via a dual OSPF attached access site.
The PE receiving the incorrect route:
7609#sh ip ospf 116 database summary 192.168.104.0
            OSPF Router with ID (10.200.204.116) (Process ID 116)
        Summary Net Link States (Area 0)
  LS age: 1094
  Options: (No TOS-capability, DC, Downward)
  LS Type: Summary Links(Network)
  Link State ID: 192.168.104.0 (summary Network Number)
  Advertising Router: 10.200.212.116
  LS Seq Number: 80000013
  Checksum: 0xFDB1
  Length: 28
  Network Mask: /24
    MTID: 0     Metric: 1798
7609#sh ip route vrf RED 192.168.104.0        
Routing Table: RED
Routing entry for 192.168.104.0/24
  Known via "ospf 116", distance 110, metric 1798, type intra area
  Redistributing via bgp 100
  Advertised by bgp 100 match internal external 1 & 2 nssa-external 1 & 2
  Last update from 10.1.59.138 on GigabitEthernet1/0/1.3684, 00:18:23 ago
  Routing Descriptor Blocks:
  * 10.1.59.138, from 10.200.4.229, 00:18:23 ago, via GigabitEthernet1/0/1.3684
      Route metric is 1798, traffic share count is 1
7609#sh ip bgp vpnv4 vrf RED 192.168.104.0
BGP routing table entry for 100:116:192.168.104.0/24, version 195113
Paths: (1 available, best #1, table RED)
  Advertised to update-groups:
     1        
  Local
    10.1.59.138 from 0.0.0.0 (10.200.0.65)
      Origin incomplete, metric 1798, localpref 100, weight 32768, valid, sourced, best
      Extended Community: RT:100:116 OSPF DOMAIN ID:0x0005:0x000000740200
        OSPF RT:0.0.0.0:2:0 OSPF ROUTER ID:10.200.204.116:512
      mpls labels in/out 312/nolabel
7609#
Regards,
Kent.

Ive implemented what I consider to be a workaround, but it does now work as expected.  I had to filter the updates received by the PE from the primary CPE at each site to only accept the LAN range from that site, not the LAN range from other sites that it was learning via the backup CPE, via PE, via other site backup router.  I think I was barking up the wrong tree re the downward bit.  This issue is because there is indirect OSPF connectivity between all the CPE's connected to the same PE. Basically the PE needs to never pass on LSA's learnt from one CPE to another CPE then we would be all ok.
I still have an issue to solve for PPP xDSL services as they all share the one loopback as an ip unnumbered interface on the PE.  The same distribute list approach wont work there.
Here is what I have done.  There must be a less config intense and flexible approach to this. 
router ospf 116 vrf RED
distribute-list prefix RED-acacia-ospf-subnets-inbound in GigabitEthernet1/0/1.3681
distribute-list prefix RED-acacia-ospf-subnets-inbound in GigabitEthernet1/0/1.3682
distribute-list prefix RED-geebung-ospf-subnets-inbound in GigabitEthernet1/0/1.3684
distribute-list prefix RED-kawana-ospf-subnets-inbound in GigabitEthernet1/0/1.3685
distribute-list prefix RED-goldcoast-ospf-subnets-inbound in GigabitEthernet1/0/1.3686
ip prefix-list RED-geebung-ospf-subnets-inbound permit 192.168.103.0/24
ip prefix-list RED-acacia-ospf-subnets-inbound permit 192.168.100.0/24
ip prefix-list RED-acacia-ospf-subnets-inbound permit 0.0.0.0/32
ip prefix-list RED-kawana-ospf-subnets-inbound permit 192.168.104.0/24
ip prefix-list RED-goldcoast-ospf-subnets-inbound permit 192.168.101.0/24

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