I tried first compiling all ppp options into kernel. When attempting to run pppd, it aborts saying ppp support not compiled into kernel. I've double-checked options, recompiled, and rebooted 3 times, so this doesn't seem to be the real problem. I decided to build as modules, but pppd still fails telling me to look for ppp.o in the modules/net directory...I didn't find this and I don't know why it's not appearing as the options are most definitely flagged in the .config file, but did find ppp_generic.o and attempted to modprobe ppp_generic. This also fails. To wit: bash-2.05a# pppd pppd: This system lacks kernel support for PPP. This could be because the PPP kernel module could not be loaded, or because PPP was not included in the kernel configuration. If PPP was included as a module, try `/sbin/modprobe -v ppp'. If that fails, check that ppp.o exists in /lib/modules/`uname -r`/net. See README.linux file in the ppp distribution for more details. buzz net # modprobe ppp modprobe: Can't locate module ppp buzz net # modprobe ppp_generic /lib/modules/2.4.17-r5/kernel/drivers/net/ppp_generic.o: unresolved symbol sk_run_filter /lib/modules/2.4.17-r5/kernel/drivers/net/ppp_generic.o: unresolved symbol sk_chk_filter /lib/modules/2.4.17-r5/kernel/drivers/net/ppp_generic.o: insmod /lib/modules/2.4.17-r5/kernel/drivers/net/ppp_generic.o failed /lib/modules/2.4.17-r5/kernel/drivers/net/ppp_generic.o: insmod ppp_generic failed buzz net # grep -i ppp /usr/src/linux/.config CONFIG_PPP=m CONFIG_PPP_MULTILINK=y CONFIG_PPP_FILTER=y CONFIG_PPP_ASYNC=m CONFIG_PPP_SYNC_TTY=m CONFIG_PPP_DEFLATE=m CONFIG_PPP_BSDCOMP=m CONFIG_PPPOE=m Note: I did have all these set to "y" to begin with. The messages shown from prompt above are all with the "m" flag as per above.
back up your config, do a make mrproper, copy your .config back, rebuild and see if it works.
Even though pppd states that the kernel is missing ppp support, you should not count on it. I had the same problem and it wasn't the kernel at all. As far as I remember I wanted to use pppt with an alcatel home (adsl) and should have used pppoe instead. I admit that your modprobe output is somehow "strange" but if your kernel boots with ppp inside (not as modules) everything should work fine. (try dmesg | grep -i ppp) Please also post the relevant log-messages of pppd.
closing this since we have a new kernel now, and I've also seen this message have nothing to do with kernel stuff.