Make sure that you use a 32 bit mask on the loopback interface IP addresses. This is always recommended when setting up MPLS VPN.
In this specific example the loopback interfaces of PE1 and PE2 use overlapping IP addresses (i.e. 172.18.254.3/24 on lo0 PE1 overlaps with 172.18.254.2/24 on lo0 PE2 and 172.17.254.3/24 on PE1 lo1 overlaps with 172.17.254.2/24 on PE2 lo1).
Also as Giuseppe recommended, it would definitely be a good idea to use the same loopback address for both LDP and OSPF.
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