We're actively debugging this, and I'll update this post once we have this resolved.
UPDATE (6pm, Eastern): We have identified the issue, and will be making changes this evening to rectify the issue. Things should be resolved by tomorrow morning.
UPDATE 2 (9pm, Eastern): Huge thanks to the RTC Ops, RTC SE, and Core Dev Teams for diving in and helping nail this. In the interest of transparency, this issue is also preventing Microsoft from communicating to our PIC providers (Yahoo, AOL, MSN).
UPDATE 3 (8am, Eastern, 4/08/09): Federation & PIC is now back up and running at Microsoft.
PingBack from http://microsoft-sharepoint.simplynetdev.com/federation-with-microsoft-is-down-aka-its-not-you-its-me/
Started working again for me around lunch time CST. Boy did I miss it.....
Was there a root cause determined (or something you can share)?
I plan on sharing what we found, and how we resolved it ... or at least as much as I can. We're still in the process of picking up the pieces, but once the dust settles, I'll update this blog post with our post-mortem.