This started as a question, with my connection failing to come up, but after a bit of trial and error, the configuration is working, so I've edited it into a solution. Access lists and address translation is not 100% in the config below yet, but it covers the connection setup.
The setup: I have a Cisco router with 2 ethernet ports and another ADSL router with the ATM interface. My service provider offers a static IP for ADSL via an L2TP tunnel (l2tp service ip, shared secret provided, adsl username / password for auth). I want to configure the connection and the tunnel on the Cisco - 1 ethernet port internal (fa0/1), with the L2TP tunnel interface being the external / public IP on the other ethernet port (fa0/0) - but also still maintain a private network between the Cisco and other DSL router.
Internal network: 192.168.0.0/24 Private network between Cisco and other router: 10.0.0.0/24 (or could be /30). Other router is configured in PPPoE bridge mode / pass through. L2TP service: 18.104.22.168 Shared secret: 54321 ADSL username / pass: myuser@myisp / mypass
aaa new-model aaa authentication ppp default local l2tp-class l2tp_secret hidden authentication hello 10 password 54321 pseudowire-class l2tp_config encapsulation l2tpv2 protocol l2tpv2 l2tp_secret ip local interface Dialer1 interface FastEthernet0/0 description WAN / PPPoE Interface ip address 10.0.0.10 255.255.255.0 ip virtual-reassembly pppoe enable group global pppoe-client dial-pool-number 10 interface FastEthernet0/1 description LAN ip address 192.168.0.1 255.255.255.0 ip nat inside ip virtual-reassembly ip tcp adjust-mss 1412 no ip mroute-cache interface Virtual-PPP1 description L2TP Tunnel for static IP ip address negotiated ip mtu 1452 ip nat outside ip virtual-reassembly ip tcp adjust-mss 1412 shutdown no cdp enable ppp authentication pap callin ppp pap sent-username myuser@myisp password 0 mypass pseudowire 22.214.171.124 1 pw-class l2tp_config interface Dialer1 ip address negotiated encapsulation ppp shutdown dialer pool 10 ppp authentication pap callin ppp pap sent-username myuser@myisp password 0 mypass ppp ipcp route default ip route 0.0.0.0 0.0.0.0 Virtual-PPP1 ip route 126.96.36.199 255.255.255.255 Dialer1