Bug 174641

Same problem here. We've debugged this a little further. The problem lies in the
adsl-connect script. Starting at line 257 you'll see this code:

if test "$DEFROUTE" != "no" ; then
    DEFROUTE="defaultroute"
    # pppd will no longer delete an existing default route
    # so we have to help it out a little here.
    DEFRT=`ip route list | awk '/^default / { print $3 }'`
    [ -n "${DEFRT}" ] && echo $DEFRT > /etc/default-route
    route del default >/dev/null 2>&1
else
    DEFROUTE=""
fi

So if $DEFROUTE as read from the ifcfg-ppp* file is set to "no" it is then
changed to "". The new $DEFROUTE is then used as a parameter for the pppd
command line.

Later in the script starting at line 332:

    if [ "${DEFROUTE}" != "no" ] ; then
        DEFRT=`ip route list | awk '/^default / { print $3 }'`
        [ -n "${DEFRT}" ] && echo $DEFRT > /etc/default-route
        route del default >/dev/null 2>&1
    fi

$DEFROUTE is evaluated again but this time it is no longer the value from the
ifcfg-ppp* file but the changed $DEFROUTE. I consider it really bad practice to
change the value of $DEFROUTE in the script. It would be better to use another
variable to construct the value needed for the pppd command line. 

It's fixed in rp-pppoe-3.5-27.FC4.1 long ago. You should update this new 
package from FC4-update. 

You are right for FC4 but the same problem exists in RHES4 and there doesn't
seem to be an errata available yet (not even in the RHES4 Q3 beta channel).

Shall I open a new bug for RHES4?