Yes, but we have 2 stacks of 4 that are running a 4-port MLT between them. After a reboot, with the MLT hooked together, they would freak out and sometimes not detect some switches in the stack at all.
Bridging loops can also cause issues likek this. Make sure spanning tree fast learning is on for all interfaces, or, if these are not yet in production, just un-hook all patch cables and try it that way.
I assume that your "base" unit is set to base and the slave unit is not. I also assume, for the cascades, that down on switch 1 is going to up on switch 2 and that up on switch 1 is going to down on switch 2.
What does the "display hardware units" show?
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I would definately upgrade to 4.0 code...especially if you want to be able to use G4 and G5 Macs with gig nics and have them work properly when transmitting to devices that are NOT gig. Major, major buffering issues... Has to due with the fact that Macs running at gig use a TCP send window size of 64k and the fact that the switches only have 1MB of buffer space per 4 ports (I believe).
Upgrade to 4.0...both the image and diagnostic file...then reset to factory defaults. After that is done, go in to the command line and type:
>ena
#config t
(config)#qos agent buffer maximum
(config)#qos agent queue-set 4
(config)#end
#logout
Then reboot the stack.
This sets the queues up to be most like a Baystack 380 which does not have the buffer allocation issue.
This will get around the gig issues with Macs.
Another issue that was resolved, is an incorrect timer value for 100meg devices. If you connect a Cisco router to them, you will notice frequent interface up/downs in the logs...but they transition so fast you can't even see the link light go out and the switch does not see link failures. When they typed in the clocking value for 100meg, they used the same value for that at gig. Causes interfaces to bounce...but generally so fast that most devices will not notice. 800Mhz iMacs (the white pod ones with the monitor arm) notice though... Only certain chip makes are affected.
Don't even ask how I know all of this...the story is MUCH too long.
So, in other words...upgrade.
