Xfer calls using xlite (Asterisk doesn't see dtmf *2)

This call came in from the PSTN and was answered by my Softphone (xlite). When I try to transfer this call, the DTMF plays thru to the calling phone, and never gives me a chance to transfer the call. Here is the call trace which shows what is being executed as the call comes in.

Below I can use DTMF to put in the voicemailbox and the password and it works just fine, so xlite is sending the DTMF, it just seems like asterisk is not hearing it during an active PSTN=>SIP call

What do I need to do to allow asterisk to see the *2 transfer feature

    -- Starting simple switch on 'Zap/9-1'
    -- Executing Set("Zap/9-1", "DYNAMIC_FEATURES=automon") in new stack
    -- Executing Goto("Zap/9-1", "default|mjones|1") in new stack
    -- Goto (default,mjones,1)
    -- Executing Macro("Zap/9-1", "stdexten|790|sip/mjones") in new stack
    -- Executing Dial("Zap/9-1", "sip/mjones|20|[b]tow[/b]") in new stack
    -- Called mjones
    -- SIP/mjones-24bb is ringing
    -- SIP/mjones-24bb answered Zap/9-1
  == Spawn extension (macro-stdexten, s, 1) exited non-zero on 'Zap/9-1' in macro 'stdexten'
  == Spawn extension (default, mjones, 1) exited non-zero on 'Zap/9-1'
    -- Hungup 'Zap/9-1'

Notice here, i could use DTMF to send the mailbox and the password

    -- Executing VoiceMailMain("SIP/mjones-76d8", "") in new stack
    -- Playing 'vm-login' (language 'en')
    -- Playing 'vm-password' (language 'en')
    -- Incorrect password '[b]1234[/b]' for user '[b]790[/b]' (context = default)
    -- Playing 'vm-incorrect-mailbox' (language 'en')
Mar 14 07:38:52 WARNING[11016]: app_voicemail.c:4949 vm_authenticate: Couldn't read username

---------- show features command output ---------------

Builtin Feature Default Current

Pickup *8 *8
Blind Transfer # #1
Attended Transfer *2
One Touch Monitor *1
Disconnect Call * *

Dynamic Feature Default Current


Call parking

Parking extension : 700
Parking context : parkedcalls
Parked call extensions: 701-720

I would only add that I am having this problem also when trying to use the default value of # for triggering the blind transfer. It shows up nonetheless on show features, so somehow the features routine is not being activated… It is definitely not a signalling problem since voicemail works fine.