I had the very same issue with the 1704 and I believe it's related to non-functioning PMTUD and a lack of MSS clamping and some big MTU issues. The "upgrade" on Windstream's page is actually for a Speedstream modem, not the Sagem, so they have an inaccurate link (Aaron can you report it?)
My solution was to just use the Sagem 1704 in bridge mode and use a SOHO router with a happy network stack that accepts ICMP type 3 code 4 and/or MSS clamping. I also set my MTU to 1280 just for giggles.
I know you're a network eng but »
www.cisco.com/en/US/tech ··· 79.shtml may help too.
I'm on an IPSEC VPN for work about 8 hours a day. I believe the 1704 is garbage and honestly, I wouldn't trust it either since it's Chinese Linux. Seems Sagem doesn't honor the GPL either with many of their devices.
I am a Windstream customer.