Something does not look right here. When I run HotRodReplicationTest, the test works fine and you see state transfer happening fine when the 2nd instance is started. However, when I run only HotRodReplicationTest.tesReplicatedPut method, I see this:

2010-04-12 11:08:20,401 4702 TRACE [org.infinispan.statetransfer.StateTransferManagerImpl] (HotRodWorker-2-1 Data container is 29247075
2010-04-12 11:08:20,401 4702 DEBUG [org.infinispan.statetransfer.StateTransferManagerImpl] (HotRodWorker-2-1 Initiating state transfer process
2010-04-12 11:08:20,401 4702 INFO [org.infinispan.remoting.rpc.RpcManagerImpl] (HotRodWorker-2-1 Trying to fetch state from eq-59589
2010-04-12 11:08:20,413 4714 TRACE [org.infinispan.remoting.transport.jgroups.JGroupsTransport] (Incoming-2,Infinispan-Cluster,eq-12496 Received state for cache named 'hotRodReplSync'. Attempting to apply state.
2010-04-12 11:08:20,420 4721 DEBUG [org.infinispan.statetransfer.StateTransferManagerImpl] (Incoming-2,Infinispan-Cluster,eq-12496 Applying state
2010-04-12 11:08:20,421 4722 TRACE [org.infinispan.remoting.transport.jgroups.JGroupsTransport] (STREAMING_STATE_TRANSFER-sender-1,Infinispan-Cluster,eq-59589 Received request to generate state for cache named 'hotRodReplSync'. Attempting to generate state.
2010-04-12 11:08:20,421 4722 DEBUG [org.infinispan.statetransfer.StateTransferManagerImpl] (STREAMING_STATE_TRANSFER-sender-1,Infinispan-Cluster,eq-59589 Generating state. Can provide? true
2010-04-12 11:08:20,460 4761 TRACE [org.infinispan.marshall.VersionAwareMarshaller] (STREAMING_STATE_TRANSFER-sender-1,Infinispan-Cluster,eq-59589 Wrote version 410
2010-04-12 11:08:20,462 4763 DEBUG [org.infinispan.statetransfer.StateTransferManagerImpl] (STREAMING_STATE_TRANSFER-sender-1,Infinispan-Cluster,eq-59589 Writing 1 StoredEntries to stream
2010-04-12 11:08:20,463 4764 TRACE [org.infinispan.statetransfer.StateTransferManagerImpl] (STREAMING_STATE_TRANSFER-sender-1,Infinispan-Cluster,eq-59589 Transaction log size is 0
2010-04-12 11:08:20,464 4765 TRACE [org.infinispan.marshall.VersionAwareMarshaller] (Incoming-2,Infinispan-Cluster,eq-12496 Read version 410
2010-04-12 11:08:20,465 4766 TRACE [org.infinispan.interceptors.InvocationContextInterceptor] (Incoming-2,Infinispan-Cluster,eq-12496 Invoked with command PutKeyValueCommand{key=CacheKey{data=ByteArray{size=18, hashCode=30d83d, array=[107, 0, 0, 0, 0, 0, 0, 0, 0, 0, ..]}}, value=class java.lang.Long, putIfAbsent=false, lifespanMillis=-1, maxIdleTimeMillis=-1} and InvocationContext [NonTxInvocationContext

]
2010-04-12 11:08:20,465 4766 TRACE [org.infinispan.util.concurrent.locks.LockManagerImpl] (Incoming-2,Infinispan-Cluster,eq-12496 Attempting to lock CacheKey{data=ByteArray{size=18, hashCode=30d83d, array=[107, 0, 0, 0, 0, 0, 0, 0, 0, 0, ..]}} with acquisition timeout of 10000 millis
2010-04-12 11:08:20,466 4767 TRACE [org.infinispan.util.concurrent.locks.LockManagerImpl] (Incoming-2,Infinispan-Cluster,eq-12496 Successfully acquired lock!
2010-04-12 11:08:20,466 4767 TRACE [org.infinispan.container.EntryFactoryImpl] (Incoming-2,Infinispan-Cluster,eq-12496 Creating new entry.
2010-04-12 11:08:20,466 4767 TRACE [org.infinispan.interceptors.CallInterceptor] (Incoming-2,Infinispan-Cluster,eq-12496 Executing command: PutKeyValueCommand{key=CacheKey{data=ByteArray{size=18, hashCode=30d83d, array=[107, 0, 0, 0, 0, 0, 0, 0, 0, 0, ..]}}, value=class java.lang.Long, putIfAbsent=false, lifespanMillis=-1, maxIdleTimeMillis=-1}.
2010-04-12 11:08:20,466 4767 TRACE [org.infinispan.interceptors.ReplicationInterceptor] (Incoming-2,Infinispan-Cluster,eq-12496 LOCAL mode forced on invocation. Suppressing clustered events.
2010-04-12 11:08:20,466 4767 TRACE [org.infinispan.interceptors.LockingInterceptor] (Incoming-2,Infinispan-Cluster,eq-12496 Number of entries in context: 1
2010-04-12 11:08:20,466 4767 TRACE [org.infinispan.container.entries.ReadCommittedEntry] (Incoming-2,Infinispan-Cluster,eq-12496 Updating entry (key=CacheKey{data=ByteArray{size=18, hashCode=30d83d, array=[107, 0, 0, 0, 0, 0, 0, 0, 0, 0, ..]}} removed=false valid=true changed=true created=true value=class java.lang.Long]
2010-04-12 11:08:20,469 4770 TRACE [org.infinispan.interceptors.LockingInterceptor] (Incoming-2,Infinispan-Cluster,eq-12496 Releasing lock on [CacheKey{data=ByteArray{size=18, hashCode=30d83d, array=[107, 0, 0, 0, 0, 0, 0, 0, 0, 0, ..]}}] for owner Thread[Incoming-2,Infinispan-Cluster,eq-12496,5,Thread Pools]
2010-04-12 11:08:20,470 4771 TRACE [org.infinispan.util.concurrent.locks.LockManagerImpl] (Incoming-2,Infinispan-Cluster,eq-12496 Attempting to unlock CacheKey{data=ByteArray{size=18, hashCode=30d83d, array=[107, 0, 0, 0, 0, 0, 0, 0, 0, 0, ..]}}
2010-04-12 11:08:20,470 4771 TRACE [org.infinispan.statetransfer.StateTransferManagerImpl] (STREAMING_STATE_TRANSFER-sender-1,Infinispan-Cluster,eq-59589 Waiting for a distributed sync block
2010-04-12 11:08:20,472 4773 ERROR [org.infinispan.remoting.transport.jgroups.JGroupsTransport] (Incoming-2,Infinispan-Cluster,eq-12496 Caught while requesting or applying state
org.infinispan.statetransfer.StateTransferException: Expected a delimiter, recieved class java.util.concurrent.CopyOnWriteArraySet
at org.infinispan.statetransfer.StateTransferManagerImpl.assertDelimited(StateTransferManagerImpl.java:389)
at org.infinispan.statetransfer.StateTransferManagerImpl.assertDelimited(StateTransferManagerImpl.java:384)
at org.infinispan.statetransfer.StateTransferManagerImpl.applyState(StateTransferManagerImpl.java:307)
at org.infinispan.remoting.InboundInvocationHandlerImpl.applyState(InboundInvocationHandlerImpl.java:73)
at org.infinispan.remoting.transport.jgroups.JGroupsTransport.setState(JGroupsTransport.java:564)
at org.jgroups.blocks.MessageDispatcher$ProtocolAdapter.handleUpEvent(MessageDispatcher.java:665)
at org.jgroups.blocks.MessageDispatcher$ProtocolAdapter.up(MessageDispatcher.java:725)
at org.jgroups.JChannel.up(JChannel.java:1420)
at org.jgroups.stack.ProtocolStack.up(ProtocolStack.java:855)
at org.jgroups.protocols.pbcast.FLUSH.up(FLUSH.java:483)
at org.jgroups.protocols.pbcast.STREAMING_STATE_TRANSFER.connectToStateProvider(STREAMING_STATE_TRANSFER.java:523)
at org.jgroups.protocols.pbcast.STREAMING_STATE_TRANSFER.handleStateRsp(STREAMING_STATE_TRANSFER.java:462)
at org.jgroups.protocols.pbcast.STREAMING_STATE_TRANSFER.up(STREAMING_STATE_TRANSFER.java:224)
at org.jgroups.protocols.FRAG2.up(FRAG2.java:188)
at org.jgroups.protocols.FC.up(FC.java:474)
at org.jgroups.protocols.pbcast.GMS.up(GMS.java:890)
at org.jgroups.protocols.pbcast.STABLE.up(STABLE.java:234)
at org.jgroups.protocols.UNICAST.handleDataReceived(UNICAST.java:614)
at org.jgroups.protocols.UNICAST.up(UNICAST.java:294)
at org.jgroups.protocols.pbcast.NAKACK.up(NAKACK.java:707)
at org.jgroups.protocols.VERIFY_SUSPECT.up(VERIFY_SUSPECT.java:131)
at org.jgroups.protocols.FD.up(FD.java:261)
at org.jgroups.protocols.FD_SOCK.up(FD_SOCK.java:269)
at org.jgroups.stack.Protocol.up(Protocol.java:353)
at org.jgroups.protocols.Discovery.up(Discovery.java:277)
at org.jgroups.protocols.TP.passMessageUp(TP.java:982)
at org.jgroups.protocols.TP.access$100(TP.java:55)
at org.jgroups.protocols.TP$IncomingPacket.handleMyMessage(TP.java:1522)
at org.jgroups.protocols.TP$IncomingPacket.run(TP.java:1504)
at java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1110)
at java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:603)
at java.lang.Thread.run(Thread.java:636)
2010-04-12 11:08:20,473 4774 WARN [org.infinispan.remoting.rpc.RpcManagerImpl] (HotRodWorker-2-1 Could not find available peer for state, backing off and retrying
2010-04-12 11:08:21,473 5774 INFO [org.infinispan.remoting.rpc.RpcManagerImpl] (HotRodWorker-2-1 Trying to fetch state from eq-59589
2010-04-12 11:08:21,478 5779 TRACE [org.infinispan.remoting.transport.jgroups.JGroupsTransport] (Incoming-2,Infinispan-Cluster,eq-12496 Received state for cache named 'hotRodReplSync'. Attempting to apply state.

Attaching logs