Google is damn quick, searching for the fix, I came across my own post here.
Well it seems to be indeed a problem with the ipmasq. Someone somewhere suggested not starting ipmasq on startup and instead putting it in the ipup.d directory. But since I think that that may stop the clients from initiating the ppp link I didn't do that. Instead, I just typed "apt-get install diald". It initiated the link, and seems to work, but I'll have to do more testing.
I hope anyone with the same problem I had manages to google onto this page before wasting the time I did trying to make pppd work.
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