WCollins, what did surprise me though was the controller's reluctance to accept that I was really only at 800ft as per the clearance. Over here (UK) they would always verify a mode C readout via the RT (ie check with the pilot).
I guess the MAH controller was just playing safe especially given the possibility of missunderstanding each others' accents. Still it was frustrating given that I had understood and readback (several times) the clearance, confirmed my actual alt on the qnh (which was 1012 so pretty close to FL pressure reference) yet was being ordered to descend. As I left the zone he was still reporting my recorded alt as 2500' (to IFR traffic) but stating that the pilot was saying he was at 800' only.
I am also surprised that the error (fault) had reversed in direction at Perpignan. Obviously there was a genuine problem with the Mode C.
Was all a bit of a shame really. I had a 800nm journey ahead and didn't need this at the very beginning. Wifey was getting "concerned" (she was listening to the RT) - I assured her that equipment failures were not a big issue in their own right - its how you handle them.
Rich