Part of the IP header is a field known as Time To Live (TTL). Every time an IP packet goes through a router (layer 3 interface) the TTL is reduced. If the TTL gets to 0 the router drops the packet and sends an ICMP error indicating TTL expired in transit. So it looks like the router at 172.16.1.2 has your packet with TTL of 0. In my experience this symptom frequently indicates a routing loop. If you do tracert (since you seem to be dong this from a windows PC command prompt) to the same address it will show the path through the network, and I suspect that it will reveal that there is a routing loop (you will see the same pair of addresses multiple times in the tracert results).
Check your routing table,& check the routing config on both routers, and try to dial(if you can't telnet) into 172.16.1.2. this where the pkt drops and u get timed out. Check the config, log, on this router.
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