vPC with nexus 5k and without 1000v?

We are using ESXi 5.0 WITHOUT a nexus 1000v going to 2 nexus 5k's over 10 gige.  We are trying to setup a portchannel / vPC between the 2 nexus switches without LACP using channel-group mode on .  We have spoke to several cisco engineers who say this should work and verified our nexus configs and UCS settings, seems like everything is correct. Pings are going out and not coming back as long as VPC is enabled.  If we disable one nic or break the VPC pings and connectivity work as they should.  Cisco is now blaming it on a VMWare config.  I am starting to question if vpc is even supported withnout a 1000v? Anyone know? I cant seem to find anyone with this use case.

And before anyone links to the link below - we have already tried it - iphashing is setup on the switch and vmware side/management network

http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=1022751

This is what the 5k config looks like its identical on both switches

interface port-channel5

  switchport mode trunk

  spanning-tree port type edge trunk

  speed 10000

  vpc 5

Thanks,