I have now tried the replacement 5268AC with the same result. Bridging just does not work with ether of these devices. I did buy an old Actiontec C2000A (you guessed it...eBay!) and have had great results right out of the box so I guess it was not a cockpit error on my part after all.
I found that by setting the C2000A's ISP protocol to "Transparent Bridging 0/35" on the Settings:WAN Settings tab it just works. This solves my problem (for ~$30) and now I can finish configuring my system.
I do appreciate your help Liam but I have spent about 10 hours trying to get the Pace modem to bridge with ZERO progress. I think that there must be a software barrier, possible in some but not all revisions, that is blocking traffic in this mode.
I will send one 5268 back now and the other at the end of my 1 year incentive period. Maybe this will get more fully resolved in the future.
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