SOLVED!
Thank me later that I saved you an half day of testing to figure out what it was, LOL.
1.3 m0n0wall, "Negotiation mode" is broken on 'Aggressive'
I setup two brand new 1.3 m0n0wall boxes on a private network to finally figure this one out.
The instructions on the website recommend "Aggressive' instead of 'main' to speed things up, but I've found this is broken in 1.3 vs. the 1.2X series that I just tested with.
I'll file a bug report, but I'm glad I found the solution and hope this saves anyone else reading this a day worth of testing and teeth gnashing.