Custom STS as a Claims Trust Provider in ADFS 2.0

Hi

In our Proof of concept scenario we are trying to implement ADFS 2.0 (let's called ADFS 1) federation with Custom STS. I have implemented a simple CustomSTS. This CustomSTS is configured to sign and encrypt the claims. For signing it is configured to use"STSTestCert" and for encryption it is configured to use ADFS 1 encryption certificate (.cer). 

Here is the scenario. 

1. Application1 is configured using ADFS 1 as Identity provider. 
2. Application1 is configured as relying party in ADFS1
3. Custom STS is configured as Claims Trust Provider in ADFS1
4. A typical user tries to login to Application1. He/She will be redirected to ADFS1 homerealm page.
5. User can select ADFS1 or CustomSTS as identity providers
6. When user selects ADFS1. The whole process, i.e issuing the token, sign, encrypting works fine. At the end, user is logged in and can see the Application1 page.
7. When user select CustomSTS. He/She will be redirected to the login screen and up on the successful login CusomSTS is posting a saml token to ADFS1 at (adfs/ls).
8. In the fiddler i can see token (Signed and encrypted.)
9. On ADFS1. It cannot process the token some how. I can see this error: "System.ArgumentException: A SamlAssertion requires at least one statement.  Ensure that you have added at least one SamlStatement to the SamlAssertion you are creating.
10. Then i tried to disable the encryption on CustomSTS just see what Custom STS is posting to ADFS1. I can see the SAML token is posted to ADFS1 and seems like token is correct. i mean with proper saml assertions. When i paid some attention i can see that CustomSTS is posting a <trust:RequestSecurityTokenResponseCollection>. This collection has a SecurityTokenResponse. 

It seems like ADFS1 cannot decrypt or It can decrypt but cannot see any token as it is a collection. I dont know whats going wrong here. Can you guyz please suggest me something.

Thanks in advance.

/Rakesh