I am having the same problem. I've tried to enabled MPPE. I also tried
to uncomment "require-mppe-128" in /etc/ppp/options.pptp as mentioned in
the post http://david-burger.blogspot.com/2009/05/vpn-fix-after-ubuntu-
update-lcp.html . Nothing worked for me.

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VPN Not Connecting in Jaunty, but was in Intrepid
https://bugs.launchpad.net/bugs/362397
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