In "debug ppp nego" if you notice the magic number that is being sent out and what you are getting in CONFREQ is the same number, then that proves that the line is looped.
Your best bet at this time is to have telco loop to the D mark and then to the NT1 and see what they
come up with. Another thing that you can try, for troubleshooting purposes is to have the cable
replaced and see what happens.
Thanks, Mak.