ospf on pppoe session

not so easy task. very much dependend on IOS software version.
For 3640 best is 12.3(14)T7
With 12.2 and 12.4 i was not able to achieve desired functionality.

the main steps are.
1. On Server site is to enable DHCP server to deliver ip addresses from pool.
2. On Client use ip address dhcp to receive /24 address for ppp interface!!!
3. On both sites use ip ospf mtu-ignore to ignore DDR packet mtu setting (both sides has different mtu sizes)

here goes configurations:

client:

R3#

!
interface Dialer1
ip address dhcp
encapsulation ppp
ip ospf mtu-ignore
no peer neighbor-route ## this removes connected route to peer - sometimes this can help avoid some ospf flapping
dialer pool 1
dialer idle-timeout 0
dialer persistentend
!

!
interface Virtual-Template2
ip address 150.1.40.1 255.255.255.0
ip ospf mtu-ignore
no peer neighbor-route ## this removes connected route to peer - sometimes this can help avoid some ospf flapping
peer default ip address dhcp-pool test_02
!

main paroblem that can occur running ospf on dial interface is mtu mismach between peers. usualu dialer (client) gets 1500 and virtual-access gets 1492 (server calculates actual one)
ospf will stuck EXCHANGE state - because DDR packet is can not fit into 1500 packet.
thereis two options:
1. use ip ospf mtu-ignore on the interface configuration level
2. make dialer interface mtu = virtual-access mtu
interface Dialer1
mtu 1492
ip address dhcp
encapsulation ppp
dialer pool 1
dialer persistent
end

very good explanation about mtu issues is no Ivan Pepelnjak's site:
http://ioshints.blogspot.com/2007/10/tale-of-three-mtus.html