IPSec UDP Encapsulation problem with Windows 2003 SP1

We use IPSec to secure communications between our SQL servers. We recently
loaded SP1 on one of the SQL servers. The SQL server with SP1 can no longer
initiate communcation with SQL servers without SP1. The servers without SP1
can initiate communication with the server with SP1. Communication was
working properly in both directions before installing SP1.

Using Network monitor, you can see that the servers are successfully
negotiating an SA, but they never start passing encapsulated traffic, they
just continuously renegoitating security.

Based on a KB article, 818043, we added a regkey that forces the server to
assume UDP encapsulation. The article is actually for XP. Adding the reg
key seems to work to allow our 2003 web servers with SP1 to talk to our SQL
servers, but not to allow communication between the SQL servers in question.

Any ideas