sorry didn't notice your IOS. I'm using RSP720-3C-GE (MSFC4) and 7600-ES+20G3C. Also used xconnect on the interface and not on a service instance. And didn't use both encapsulation and pw-class under the xconnect line. Just used pw-class. What module...

Hey peter,     I tried that exact same setup. I upgraded from SRD2a to SRD4 and it worked. Give it a try.Rod