Trying to sort through the options here, but this is the fundamental problem. The static sub interface on the dSL is up/down
at-1/0/0.0 up down inet 8x.7x.x9.x1 --> 0/0
Since this is down your public address is in reject instead of active
and your default route will not install because the interface is down.
I cannot see the error with the configuration causing the connection negociation to fail.
Can you try enabling trace options on the at interface and see what logging we get for the connection?
set interface at-1/0/0 traceoptions file dsl.log
set interface at-1/0/0 traceoptions flag all
Then show the results using:
show log dsl.log