I established an L2 between JUNOS & IOS. I wasn't able to carry traffic from CE to CE coz Junos gives some "overrun array" error etc. However, the mpls ping has been successful unlike Junos to Junos as I pasted above.
Your configuration looks perfect, I tried the draft martini in past and it worked without any issue with olive.
I advice you to restart the device and try it on the plain Ethernet interface as well (don't remember now but I think I tried draft martini on plain Ethernet interface instead of dot1q interface in Olive, don't believe on olive 100% as many stuff does not work on it).
If possible send the output of following CLI as well.
run show ldp neighbor run show route table inet.3
Here is link about the working stuff on olive (not sure about the authenticity os the link).