Yes, I am absolutely sure the link is all the way up.  I played with
this a lot.  No, I did not turn on full debugging, just some of it,
and saw the packets coming from the other end with 4 bytes of magic
number, without 2 extra bytes for pppd to ignore.  

Perhaps all you people who say "It works perfectly already" are using
the same broken netbsd pppd on both ends?  I fixed the LCP echo-reply
packets that pppd sent as well as its interpretation of incoming
echo-reply packets.  So they agreed with each other before.  RFC1171
says the magic number is four bytes, and in fact pppd interprets it as
a four-byte quantity, it just gratuitously punts if it's less than 6
bytes before examining it (when it ignores the two extra bytes).

My PPP connection is to a Livingston Portmaster terminal server.  Not
to denigrate free software, but I have more confidence that this box
is correctly implementing the PPP protocol than that netbsd's pppd
does.