I have an RF660 running 3.12 connected to an RF600 running 3.25 with an IPSec VPN. Shortly after we start a telnet or ssh session inside the tunnel the application freezes and cannot be restarted.

You should upgrade your RF660 so both sides are running the same version of the software.

In your RouteFinder 3.25 setup, try make the following changes:
In packet filter rule -->Advanced, disable the following options:
1) TCP strict
2) Strict
3) Drop fragmentation packets