Very Computer

Redhat 6.0
Kernel 2.2.5-15 (standard RedHat kernel)
pppd 2.3.7

ifcfg-ppp0:

DEVICE="ppp0"
ONBOOT="yes"
USERCTL="yes"
MODEMPORT="/dev/ttyS3"
LINESPEED="57600"
PERSIST="yes"
DEFABORT="yes"
DEBUG="yes"
INITSTRING="AT&FM0L0"
DEFROUTE="yes"
HARDFLOWCTL="yes"
ESCAPECHARS="no"
PPPOPTIONS="demand ipcp-accept-local ipcp-accept-remote idle 300"
PAPNAME=""
REMIP="192.168.1.1"
NETMASK="0.0.0.0"
IPADDR="192.168.1.2"
MRU=""
MTU=""
DISCONNECTTIMEOUT="5"
RETRYTIMEOUT="5"
BOOTPROTO="none"

network:

NETWORKING=yes
FORWARD_IPV4="yes"
HOSTNAME="lilshroom.mushroom.ihug.co.nz"
DOMAINNAME=mushroom.ihug.co.nz
GATEWAY="192.168.1.1"
GATEWAYDEV=""
NISDOMAIN=""

PROBLEM:

When the machine first starts up, and I try ping any internet address
I get an error:

PING 203.29.160.4 (203.29.160.4): 56 data bytes
ping: sendto: Operation not permitted
ping: wrote 203.29.160.4 64 chars, ret=-1
ping: sendto: Operation not permitted
ping: wrote 203.29.160.4 64 chars, ret=-1
ping: sendto: Operation not permitted
ping: wrote 203.29.160.4 64 chars, ret=-1

--- 203.29.160.4 ping statistics ---
3 packets transmitted, 0 packets received, 100% packet loss

OK so I shut down the faulty virtual ppp link thus:  ((ethernet
omitted))

lo        Link encap:Local Loopback  
          inet addr:127.0.0.1  Mask:255.0.0.0
          UP LOOPBACK RUNNING  MTU:3924  Metric:1
          RX packets:25 errors:0 dropped:0 overruns:0 frame:0
          TX packets:25 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0

ppp1      Link encap:Point-to-Point Protocol <-This must be it right??
          inet addr:192.168.1.2  P-t-P:192.168.1.1
Mask:255.255.255.255
          UP POINTOPOINT RUNNING NOARP MULTICAST  MTU:1500  Metric:1
          RX packets:0 errors:0 dropped:0 overruns:0 frame:0
          TX packets:0 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:10

lo        Link encap:Local Loopback  
          inet addr:127.0.0.1  Mask:255.0.0.0
          UP LOOPBACK RUNNING  MTU:3924  Metric:1
          RX packets:25 errors:0 dropped:0 overruns:0 frame:0
          TX packets:25 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0

Then bring it back up:

lo        Link encap:Local Loopback  
          inet addr:127.0.0.1  Mask:255.0.0.0
          UP LOOPBACK RUNNING  MTU:3924  Metric:1
          RX packets:25 errors:0 dropped:0 overruns:0 frame:0
          TX packets:25 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0

ppp2      Link encap:Point-to-Point Protocol  
          inet addr:192.168.1.2  P-t-P:192.168.1.1
Mask:255.255.255.255
          UP POINTOPOINT RUNNING NOARP MULTICAST  MTU:1500  Metric:1
          RX packets:0 errors:0 dropped:0 overruns:0 frame:0
          TX packets:0 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:10

and now...

PING 203.29.160.4 (203.29.160.4): 56 data bytes
****SHORT WAIT WHILST MODEM DIALS AND CONNECTS****
64 bytes from 203.29.160.4: icmp_seq=75 ttl=62 time=184.6 ms
64 bytes from 203.29.160.4: icmp_seq=76 ttl=62 time=173.7 ms
64 bytes from 203.29.160.4: icmp_seq=77 ttl=62 time=163.4 ms
64 bytes from 203.29.160.4: icmp_seq=78 ttl=62 time=160.6 ms

--- 203.29.160.4 ping statistics ---
79 packets transmitted, 4 packets received, 94% packet loss
round-trip min/avg/max = 160.6/170.5/184.6 ms

Any ideas? all suggestions welcome, and any other information required
gladly given.  I'd like to keep this one on the newsgroup for others
to see but I suppose email is welcome

Thanks in advance.. whoever can help me...

Dan