I've tried to combine queueing and shaping on an mGRE tunnel interface using a nested policy map. I never was able to get the shaping to work. I configured the policy map on the tunnel interface to shape at 10% of the interface bandwidth. But when doing UDP floods using WAN killer, the policy had no effect. But I was able to get it to work by applying the policy-map to the physical interface that the tunnel is sourced from. I'm using IOS 12.3(14)T7, Adv Enterprise Srv, on a 3745 router. Is this a limitation of the IOS?
This link suggests that you can shape on a tunnel interface, but this references IOS 12.4.