[pptp-server] MPPE refused by pppd even when enabled?

[Andrew Kohlsmith]

Windows 98 client with "require data encryption" checked. 
ppp 2.4.1 with MPPE patch
PoPToP v1.1.2
kernel 2.1.17 with 2.4.16's MPPE patch (module verified to be loaded)
OpenSSL 0.96

When the client connects we reject MPPE.  Any idea why?

Jan 28 10:58:06 fw pppd[19916]: rcvd [CCP ConfReq id=0x1 <mppe 1 0 0 31> <lzs 
0 1 4>]
Jan 28 10:58:06 fw pppd[19916]: sent [CCP ConfRej id=0x1 <mppe 1 0 0 31> <lzs 
0 1 4>]

ppp configuration:
debug
auth
show-password
asyncmap 0
nodetach
name benshaw-ppp
ms-dns 192.168.1.1
ms-wins 192.168.1.3
proxyarp
+chapms-v2
#chapms-strip-domain
-chapms
-chap
mppe-40
mppe-128
mppe-stateless
mtu 1400
mru 1400
192.168.1.1:

Regards,
Andrew