mj6,
ok - the easiest thing to do is to check the voice port of the gateway that ties to the MD110 and max out the echo-canceller length. Since the cause of echo is always analog, you can be assured that the echo is not being introduced in your packet network, nor the digital tdm link between the voice gateway and MD110. If you've got a PRI to the LEC too, then you can rule that out.
Alas, though we do not -cause- the echo, we are responsible for cancelling/suppressing it. If the IOS on your gateway is relatively recent, I believe ecan can be extended to 128ms, which takes care of just about everything.
Lost/late(a packet that is late is discarded) packets do not cause echo. They cause drops in audio, which your codec (since you're using callmanager, probably g711 or g729) must attempt to compensate for. A packet stream with a consistent delay(but not loss!!!) will make any existing echo more prevalent, like ISDNMan(superhero?) and I discussed above.
Also, some echo is uncancellable(at least with the software ecan in the voice gateway) - you may have to live with -some- echo, though by all means it should not be significant. I would have your users write down the numbers/time that give 'em echo, maybe you're calling a rural exchange that still has lots of analog? International calls? Satellite?
This is a great echo doc:
something more troubleshooting-centric:
paper on the enhanced ecan (128ms thing):