Correction ... it appears that the customer didn't mention a piece of the puzzle. He has two locations, one is served by Vonage and one is served by Packet8. When we spoke, he was on a phone connected to Packet8 but the number I dialed to reach him was forwarded through his Vonage service. It appears the DTMF munging is being done when he forwards his Vonage service to any other location.
Is there any way to correct this? Thanks for all your help!