When trying to establish a connection between 2 M.T. routers if (on the server side) chose NOT to use IPSEC, and do the same on the client side, the link is established.
If on the other had I chose (on the server side) IPsec=required enter a password and do the same for the client , I get a log (on server side):
L2TP connection rejected no IPsec encryption while it was required .
On the client side I get:
L2TP: terminating…-tunnel was not encrypted
Obviously there is something going on with the encryption but cannot located it …
I had a similar issue. The L2TP/IPSec creates a default Policy/Proposal/etc. I had an additional policy, an old one that I didn’t use.
When I’d connect with Win7, it would pick the correct policy and establish ok.
When I’d connect from a Mikrotik, it would give me errors about no proposal.
I never did figure out why a Win 7 L2TP/IPSec could connect, but another Mikrotik couldn’t. None the less, the solution for me was to delete the additional policy that I didn’t need anyway.
I stumbled upon this problem today as well. A router running 7.1rc6 is connecting to a router running 7.2.1, and for some reason a stray dynamic peer entry had been left dangling on the client router. Removing the peer entry made it create a new one and the tunnel was successfully established again.