Does the MPLS ping works between the two routers? -that would verify that the transport (i.e. LDP) labels for PE loopbacks are in place.
ping mpls ipv4 x.x.x.x/32 source y.y.y.y
Try cmd ” sh mpls forwarding-table” on both PEs and try to search for each other’s loopback IP /32 address.
On each PE -for the other PEs loopback in Outgoing Label column there should either be a “label value” or a “Pop Label” if the PEs are directly connected.
If it displays No Label then labels are not advertised/received for some reason.
-most of the times the problem is that LDP neighbours don’t see each other via Hello messages multicasted over the directly connected interface but only via the targeted LDP session.
– this can be caused when the interface is not enabled for MPLS i.e. cmd “mpls ip” is not enabled under the interface.
– or LDP passwords do not match.
(this will also be accompanied by OSPF advertising maximum metric for the link to avoid forwarding of MPLS packets over the link when the MPLS is actually not functional on the interface).
-or there’s a problem with access-list controlling the label advertisement on the neighbouring router.
-if the above is not the case it might be a HW programing issue.
The outgoing label for the other PE’s loopback IP address should be visible when you issue cmd “sh ip cef x.x.x.x/32 detail” *not sure about the exact syntax.