Cisco 7960G connecting to Grandstream GXE5028

I am having problem getting my Cisco 7960G SIP to connect to a Grandstream GXE5028. My X-lite softphone works fine. I have all the name, password and extension setup in GXE to be the same (all set to: 1001). I am using SIP firmware P0S3-07-5-00 on the Cisco 7960 (I also tried newer firmware).

Here is the log from the Cisco phone:

Cisco Systems, Inc. Copyright 2000-2005
Cisco IP phone MAC: 001f:cae8:ea20
Loadid: SW: P0S3-07-5-00 ARM: PAS3ARM1 Boot: PC030301 DSP: PS03AT46
SIP Phone>
SIP Phone> sh reg

LINE REGISTRATION TABLE
Proxy Registration: ENABLED, state: REGISTERING
line APR state timer expires proxy:port
---- --- ------------- ---------- ---------- ----------------------------
1 .1x REGISTERING 3600 29 192.168.1.250:5060
2 .1x REGISTERING 3600 21 192.168.1.250:5060
3 .1x REGISTERING 3600 1 192.168.1.250:5060
4 ... NONE 0 0 undefined:0
5 ... NONE 0 0 undefined:0
6 ... NONE 0 0 undefined:0
1-BU .1x REGISTERING 3600 20 192.168.1.250:5060

Note: APR is Authenticated, Provisioned, Registered
SIP Phone>


Grandsream log show:

04-19-2009 02:51:55 Local7.Debug 192.168.1.250 -+G±<001><001><000>íPrompt:[1240123977] [SIPSTACK.C 1435] [16] [65535] [65535]SIPStack.cc: 1436. Recv(transport:0, connectid:4294967295) Sip Msg(Len:501, Ip:0xc0a801c9, Port:51501).
04-19-2009 02:51:55 Local7.Debug 192.168.1.250 -+G±<001><001><000>HPrompt:[1240123977] [vmproc.c 1696] [25] [2] [65535]GSM Queue is empty !
04-19-2009 02:51:55 Local7.Debug 192.168.1.250 -+G±<001><001><000>GPrompt:[1240123977] [vmproc.c 1245] [25] [0] [65535] VM Queue is empty
04-19-2009 02:51:55 Local7.Debug 192.168.1.250 -+G±<001><001><000>HPrompt:[1240123977] [vmproc.c 1933] [25] [1] [65535]SRC Queue is empty !
04-19-2009 02:51:54 Local7.Debug 192.168.1.250 -+G±<001><001><000>HPrompt:[1240123976] [vmproc.c 1696] [25] [2] [65535]GSM Queue is empty !
04-19-2009 02:51:54 Local7.Debug 192.168.1.250 -+G±<001><001><000>GPrompt:[1240123976] [vmproc.c 1245] [25] [0] [65535] VM Queue is empty
04-19-2009 02:51:54 Local7.Debug 192.168.1.250 -+G±<001><001><000>HPrompt:[1240123976] [vmproc.c 1933] [25] [1] [65535]SRC Queue is empty !
04-19-2009 02:51:53 Local7.Debug 192.168.1.250 -+G±<001><001><002>úMessage:[1240123975] [SIPSTACK.CC 2453] [16] [65535] [65535]Send Sip Msg<013><010>SIP/2.0 401 Unauthorized<013><010>Via: SIP/2.0/UDP 192.168.1.201:5060;branch=z9hG4bK5885e7bb;rport=51497<013><010>From: <sip:1002@192.168.1.250>;tag=001fcae8ea206d1f7bb923a4-16c09fd5<013><010>To: <sip:1002@192.168.1.250>;tag=1644660582<013><010>Call-ID: 001fcae8-ea200005-4dfdce82-5ed44741 [!at] 192.168.1.201 (replace the [!at] with a @)<013><010>CSeq: 7084 REGISTER<013><010>Contact: <sip:192.168.1.250:5060><013><010>WWW-Authenticate: Digest realm="grandstream", nonce="00bfc6b1", stale=true, algorithm=MD5<013><010>Supported: replaces, timer<013><010>User-Agent: Grandstream GXE5028 1.0.1.35<013><010>Allow: INVITE, ACK, OPTIONS, CANCEL, BYE, SUBSCRIBE, NOTIFY, PUBLISH, INFO, REFER, UPDATE<013><010>Content-Length: 0
04-19-2009 02:51:53 Local7.Debug 192.168.1.250 -+G±<001><001><000>tPrompt:[1240123975] [SIPSTACK.C 2368] [16] [65535] [65535]SIPStack.cc: 2368. Snd Msg dest:192.168.1.201, port:51497.
04-19-2009 02:51:53 Local7.Debug 192.168.1.250 -+G±<001><001><002>>Message:[1240123975] [SIPSTACK.CC 1473] [16] [65535] [65535]Recv Sip Msg<013><010>REGISTER sip:192.168.1.250 SIP/2.0<013><010>Via: SIP/2.0/UDP 192.168.1.201:5060;branch=z9hG4bK5885e7bb<013><010>From: <sip:1002@192.168.1.250>;tag=001fcae8ea206d1f7bb923a4-16c09fd5<013><010>To: sip:1002@192.168.1.250<013><010>Call-ID: 001fcae8-ea200005-4dfdce82-5ed44741 [!at] 192.168.1.201 (replace the [!at] with a @)<013><010>Max-Forwards: 70<013><010>Date: Sun, 19 Apr 2009 06:54:00 GMT<013><010>CSeq: 7084 REGISTER<013><010>User-Agent: Cisco-CP7960G/7.5<013><010>Contact: <sip:1002@192.168.1.201:5060>;+sip.instance="<urn:uuid:00000000-0000-0000-0000-001fcae8ea20>"<013><010>Content-Length: 0<013><010>Expires: 3600
04-19-2009 02:51:53 Local7.Debug 192.168.1.250 -+G±<001><001><000>íPrompt:[1240123975] [SIPSTACK.C 1435] [16] [65535] [65535]SIPStack.cc: 1436. Recv(transport:0, connectid:4294967295) Sip Msg(Len:501, Ip:0xc0a801c9, Port:51500).
04-19-2009 02:51:53 Local7.Debug 192.168.1.250 -+G±<001><001><000>HPrompt:[1240123975] [vmproc.c 1696] [25] [2] [65535]GSM Queue is empty !
04-19-2009 02:51:53 Local7.Debug 192.168.1.250 -+G±<001><001><000>GPrompt:[1240123975] [vmproc.c 1245] [25] [0] [65535] VM Queue is empty
04-19-2009 02:51:53 Local7.Debug 192.168.1.250 -+G±<001><001><000>HPrompt:[1240123975] [vmproc.c 1933] [25] [1] [65535]SRC Queue is empty !
04-19-2009 02:51:52 Local7.Debug 192.168.1.250 -+G±<001><001><002>óMessage:[1240123975] [SIPSTACK.CC 2453] [16] [65535] [65535]Send Sip Msg<013><010>SIP/2.0 401 Unauthorized<013><010>Via: SIP/2.0/UDP 192.168.1.201:5060;branch=z9hG4bK297b29b1;rport=51483<013><010>From: <sip:1001@192.168.1.250>;tag=001fcae8ea206d1d69d7f8d3-49576c86<013><010>To: <sip:1001@192.168.1.250>;tag=492906700<013><010>Call-ID: 001fcae8-ea200004-781d88b8-171987c9 [!at] 192.168.1.201 (replace the [!at] with a @)<013><010>CSeq: 7083 REGISTER<013><010>Contact: <sip:192.168.1.250:5060><013><010>WWW-Authenticate: Digest realm="grandstream", nonce="009d7195", stale=true, algorithm=MD5<013><010>Supported: replaces, timer<013><010>User-Agent: Grandstream GXE5028 1.0.1.35<013><010>Allow: INVITE, ACK, OPTIONS, CANCEL, BYE, SUBSCRIBE, NOTIFY, PUBLISH, INFO, REFER, UPDATE<013><010>Content-Length: 0
04-19-2009 02:51:52 Local7.Debug 192.168.1.250 -+G±<001><001><000>tPrompt:[1240123975] [SIPSTACK.C 2368] [16] [65535] [65535]SIPStack.cc: 2368. Snd Msg dest:192.168.1.201, port:51483.


Please help!