Add basic sanity testing for channel monitor update failure handle
[rust-lightning] / src / ln / channelmanager.rs
index 748b71dcf64d576541c6b56c678c891b209e0c82..d6ba67c2b36dcf24d23e3c880ccf64ddcb5a7b19 100644 (file)
@@ -1,3 +1,13 @@
+//! The top-level channel management and payment tracking stuff lives here.
+//!
+//! The ChannelManager is the main chunk of logic implementing the lightning protocol and is
+//! responsible for tracking which channels are open, HTLCs are in flight and reestablishing those
+//! upon reconnect to the relevant peer(s).
+//!
+//! It does not manage routing logic (see ln::router for that) nor does it manage constructing
+//! on-chain transactions (it only monitors the chain to watch for any force-closes that might
+//! imply it needs to fail HTLCs/payments/channels it manages).
+
 use bitcoin::blockdata::block::BlockHeader;
 use bitcoin::blockdata::transaction::Transaction;
 use bitcoin::blockdata::constants::genesis_block;
@@ -12,13 +22,14 @@ use secp256k1;
 
 use chain::chaininterface::{BroadcasterInterface,ChainListener,ChainWatchInterface,FeeEstimator};
 use chain::transaction::OutPoint;
-use ln::channel::{Channel, ChannelKeys};
-use ln::channelmonitor::ManyChannelMonitor;
+use ln::channel::{Channel, ChannelError, ChannelKeys};
+use ln::channelmonitor::{ChannelMonitorUpdateErr, ManyChannelMonitor, CLTV_CLAIM_BUFFER, HTLC_FAIL_TIMEOUT_BLOCKS};
 use ln::router::{Route,RouteHop};
 use ln::msgs;
-use ln::msgs::{HandleError,ChannelMessageHandler,MsgEncodable,MsgDecodable};
+use ln::msgs::{ChannelMessageHandler, HandleError, RAACommitmentOrder};
 use util::{byte_utils, events, internal_traits, rng};
 use util::sha2::Sha256;
+use util::ser::{Readable, Writeable};
 use util::chacha20poly1305rfc::ChaCha20;
 use util::logger::Logger;
 use util::errors::APIError;
@@ -32,20 +43,36 @@ use crypto::symmetriccipher::SynchronousStreamCipher;
 use std::{ptr, mem};
 use std::collections::HashMap;
 use std::collections::hash_map;
+use std::io::Cursor;
 use std::sync::{Mutex,MutexGuard,Arc};
 use std::sync::atomic::{AtomicUsize, Ordering};
 use std::time::{Instant,Duration};
 
+/// We hold various information about HTLC relay in the HTLC objects in Channel itself:
+///
+/// Upon receipt of an HTLC from a peer, we'll give it a PendingHTLCStatus indicating if it should
+/// forward the HTLC with information it will give back to us when it does so, or if it should Fail
+/// the HTLC with the relevant message for the Channel to handle giving to the remote peer.
+///
+/// When a Channel forwards an HTLC to its peer, it will give us back the PendingForwardHTLCInfo
+/// which we will use to construct an outbound HTLC, with a relevant HTLCSource::PreviousHopData
+/// filled in to indicate where it came from (which we can use to either fail-backwards or fulfill
+/// the HTLC backwards along the relevant path).
+/// Alternatively, we can fill an outbound HTLC with a HTLCSource::OutboundRoute indicating this is
+/// our payment, which we can use to decode errors or inform the user that the payment was sent.
 mod channel_held_info {
        use ln::msgs;
+       use ln::router::Route;
+       use secp256k1::key::SecretKey;
+       use secp256k1::ecdh::SharedSecret;
 
        /// Stores the info we will need to send when we want to forward an HTLC onwards
        #[derive(Clone)] // See Channel::revoke_and_ack for why, tl;dr: Rust bug
        pub struct PendingForwardHTLCInfo {
                pub(super) onion_packet: Option<msgs::OnionPacket>,
+               pub(super) incoming_shared_secret: SharedSecret,
                pub(super) payment_hash: [u8; 32],
                pub(super) short_channel_id: u64,
-               pub(super) prev_short_channel_id: u64,
                pub(super) amt_to_forward: u64,
                pub(super) outgoing_cltv_value: u32,
        }
@@ -63,22 +90,39 @@ mod channel_held_info {
                Fail(HTLCFailureMsg),
        }
 
-       #[cfg(feature = "fuzztarget")]
-       impl PendingHTLCStatus {
+       /// Tracks the inbound corresponding to an outbound HTLC
+       #[derive(Clone)]
+       pub struct HTLCPreviousHopData {
+               pub(super) short_channel_id: u64,
+               pub(super) htlc_id: u64,
+               pub(super) incoming_packet_shared_secret: SharedSecret,
+       }
+
+       /// Tracks the inbound corresponding to an outbound HTLC
+       #[derive(Clone)]
+       pub enum HTLCSource {
+               PreviousHopData(HTLCPreviousHopData),
+               OutboundRoute {
+                       route: Route,
+                       session_priv: SecretKey,
+                       /// Technically we can recalculate this from the route, but we cache it here to avoid
+                       /// doing a double-pass on route when we get a failure back
+                       first_hop_htlc_msat: u64,
+               },
+       }
+       #[cfg(test)]
+       impl HTLCSource {
                pub fn dummy() -> Self {
-                       PendingHTLCStatus::Forward(PendingForwardHTLCInfo {
-                               onion_packet: None,
-                               payment_hash: [0; 32],
-                               short_channel_id: 0,
-                               prev_short_channel_id: 0,
-                               amt_to_forward: 0,
-                               outgoing_cltv_value: 0,
-                       })
+                       HTLCSource::OutboundRoute {
+                               route: Route { hops: Vec::new() },
+                               session_priv: SecretKey::from_slice(&::secp256k1::Secp256k1::without_caps(), &[1; 32]).unwrap(),
+                               first_hop_htlc_msat: 0,
+                       }
                }
        }
 
        #[derive(Clone)] // See Channel::revoke_and_ack for why, tl;dr: Rust bug
-       pub enum HTLCFailReason {
+       pub(crate) enum HTLCFailReason {
                ErrorPacket {
                        err: msgs::OnionErrorPacket,
                },
@@ -87,38 +131,8 @@ mod channel_held_info {
                        data: Vec<u8>,
                }
        }
-
-       #[cfg(feature = "fuzztarget")]
-       impl HTLCFailReason {
-               pub fn dummy() -> Self {
-                       HTLCFailReason::Reason {
-                               failure_code: 0, data: Vec::new(),
-                       }
-               }
-       }
-}
-#[cfg(feature = "fuzztarget")]
-pub use self::channel_held_info::*;
-#[cfg(not(feature = "fuzztarget"))]
-pub(crate) use self::channel_held_info::*;
-
-enum PendingOutboundHTLC {
-       IntermediaryHopData {
-               source_short_channel_id: u64,
-               incoming_packet_shared_secret: SharedSecret,
-       },
-       OutboundRoute {
-               route: Route,
-               session_priv: SecretKey,
-       },
-       /// Used for channel rebalancing
-       CycledRoute {
-               source_short_channel_id: u64,
-               incoming_packet_shared_secret: SharedSecret,
-               route: Route,
-               session_priv: SecretKey,
-       }
 }
+pub(super) use self::channel_held_info::*;
 
 struct MsgHandleErrInternal {
        err: msgs::HandleError,
@@ -163,6 +177,48 @@ impl MsgHandleErrInternal {
        fn from_no_close(err: msgs::HandleError) -> Self {
                Self { err, needs_channel_force_close: false }
        }
+       #[inline]
+       fn from_chan_no_close(err: ChannelError, channel_id: [u8; 32]) -> Self {
+               Self {
+                       err: match err {
+                               ChannelError::Ignore(msg) => HandleError {
+                                       err: msg,
+                                       action: Some(msgs::ErrorAction::IgnoreError),
+                               },
+                               ChannelError::Close(msg) => HandleError {
+                                       err: msg,
+                                       action: Some(msgs::ErrorAction::SendErrorMessage {
+                                               msg: msgs::ErrorMessage {
+                                                       channel_id,
+                                                       data: msg.to_string()
+                                               },
+                                       }),
+                               },
+                       },
+                       needs_channel_force_close: false,
+               }
+       }
+       #[inline]
+       fn from_chan_maybe_close(err: ChannelError, channel_id: [u8; 32]) -> Self {
+               Self {
+                       err: match err {
+                               ChannelError::Ignore(msg) => HandleError {
+                                       err: msg,
+                                       action: Some(msgs::ErrorAction::IgnoreError),
+                               },
+                               ChannelError::Close(msg) => HandleError {
+                                       err: msg,
+                                       action: Some(msgs::ErrorAction::SendErrorMessage {
+                                               msg: msgs::ErrorMessage {
+                                                       channel_id,
+                                                       data: msg.to_string()
+                                               },
+                                       }),
+                               },
+                       },
+                       needs_channel_force_close: true,
+               }
+       }
 }
 
 /// We hold back HTLCs we intend to relay for a random interval in the range (this, 5*this). This
@@ -171,6 +227,12 @@ impl MsgHandleErrInternal {
 /// probably increase this significantly.
 const MIN_HTLC_RELAY_HOLDING_CELL_MILLIS: u32 = 50;
 
+struct HTLCForwardInfo {
+       prev_short_channel_id: u64,
+       prev_htlc_id: u64,
+       forward_info: PendingForwardHTLCInfo,
+}
+
 struct ChannelHolder {
        by_id: HashMap<[u8; 32], Channel>,
        short_to_id: HashMap<u64, [u8; 32]>,
@@ -179,18 +241,18 @@ struct ChannelHolder {
        /// Note that while this is held in the same mutex as the channels themselves, no consistency
        /// guarantees are made about there existing a channel with the short id here, nor the short
        /// ids in the PendingForwardHTLCInfo!
-       forward_htlcs: HashMap<u64, Vec<PendingForwardHTLCInfo>>,
+       forward_htlcs: HashMap<u64, Vec<HTLCForwardInfo>>,
        /// Note that while this is held in the same mutex as the channels themselves, no consistency
        /// guarantees are made about the channels given here actually existing anymore by the time you
        /// go to read them!
-       claimable_htlcs: HashMap<[u8; 32], PendingOutboundHTLC>,
+       claimable_htlcs: HashMap<[u8; 32], Vec<HTLCPreviousHopData>>,
 }
 struct MutChannelHolder<'a> {
        by_id: &'a mut HashMap<[u8; 32], Channel>,
        short_to_id: &'a mut HashMap<u64, [u8; 32]>,
        next_forward: &'a mut Instant,
-       forward_htlcs: &'a mut HashMap<u64, Vec<PendingForwardHTLCInfo>>,
-       claimable_htlcs: &'a mut HashMap<[u8; 32], PendingOutboundHTLC>,
+       forward_htlcs: &'a mut HashMap<u64, Vec<HTLCForwardInfo>>,
+       claimable_htlcs: &'a mut HashMap<[u8; 32], Vec<HTLCPreviousHopData>>,
 }
 impl ChannelHolder {
        fn borrow_parts(&mut self) -> MutChannelHolder {
@@ -209,6 +271,7 @@ const ERR: () = "You need at least 32 bit pointers (well, usize, but we'll assum
 
 /// Manager which keeps track of a number of channels and sends messages to the appropriate
 /// channel, also tracking HTLC preimages and forwarding onion packets appropriately.
+///
 /// Implements ChannelMessageHandler, handling the multi-channel parts and passing things through
 /// to individual Channels.
 pub struct ChannelManager {
@@ -231,7 +294,27 @@ pub struct ChannelManager {
        logger: Arc<Logger>,
 }
 
+/// The minimum number of blocks between an inbound HTLC's CLTV and the corresponding outbound
+/// HTLC's CLTV. This should always be a few blocks greater than channelmonitor::CLTV_CLAIM_BUFFER,
+/// ie the node we forwarded the payment on to should always have enough room to reliably time out
+/// the HTLC via a full update_fail_htlc/commitment_signed dance before we hit the
+/// CLTV_CLAIM_BUFFER point (we static assert that its at least 3 blocks more).
 const CLTV_EXPIRY_DELTA: u16 = 6 * 24 * 2; //TODO?
+const CLTV_FAR_FAR_AWAY: u32 = 6 * 24 * 7; //TODO?
+
+// Check that our CLTV_EXPIRY is at least CLTV_CLAIM_BUFFER + 2*HTLC_FAIL_TIMEOUT_BLOCKS, ie that
+// if the next-hop peer fails the HTLC within HTLC_FAIL_TIMEOUT_BLOCKS then we'll still have
+// HTLC_FAIL_TIMEOUT_BLOCKS left to fail it backwards ourselves before hitting the
+// CLTV_CLAIM_BUFFER point and failing the channel on-chain to time out the HTLC.
+#[deny(const_err)]
+#[allow(dead_code)]
+const CHECK_CLTV_EXPIRY_SANITY: u32 = CLTV_EXPIRY_DELTA as u32 - 2*HTLC_FAIL_TIMEOUT_BLOCKS - CLTV_CLAIM_BUFFER;
+
+// Check for ability of an attacker to make us fail on-chain by delaying inbound claim. See
+// ChannelMontior::would_broadcast_at_height for a description of why this is needed.
+#[deny(const_err)]
+#[allow(dead_code)]
+const CHECK_CLTV_EXPIRY_SANITY_2: u32 = CLTV_EXPIRY_DELTA as u32 - HTLC_FAIL_TIMEOUT_BLOCKS - 2*CLTV_CLAIM_BUFFER;
 
 macro_rules! secp_call {
        ( $res: expr, $err: expr ) => {
@@ -252,6 +335,7 @@ struct OnionKeys {
        mu: [u8; 32],
 }
 
+/// Details of a channel, as returned by ChannelManager::list_channels and ChannelManager::list_usable_channels
 pub struct ChannelDetails {
        /// The channel's ID (prior to funding transaction generation, this is a random 32 bytes,
        /// thereafter this is the txid of the funding transaction xor the funding transaction output).
@@ -261,17 +345,23 @@ pub struct ChannelDetails {
        /// The position of the funding transaction in the chain. None if the funding transaction has
        /// not yet been confirmed and the channel fully opened.
        pub short_channel_id: Option<u64>,
+       /// The node_id of our counterparty
        pub remote_network_id: PublicKey,
+       /// The value, in satoshis, of this channel as appears in the funding output
        pub channel_value_satoshis: u64,
        /// The user_id passed in to create_channel, or 0 if the channel was inbound.
        pub user_id: u64,
 }
 
 impl ChannelManager {
-       /// Constructs a new ChannelManager to hold several channels and route between them. This is
-       /// the main "logic hub" for all channel-related actions, and implements ChannelMessageHandler.
+       /// Constructs a new ChannelManager to hold several channels and route between them.
+       ///
+       /// This is the main "logic hub" for all channel-related actions, and implements
+       /// ChannelMessageHandler.
+       ///
        /// fee_proportional_millionths is an optional fee to charge any payments routed through us.
        /// Non-proportional fees are fixed according to our risk using the provided fee estimator.
+       ///
        /// panics if channel_value_satoshis is >= `MAX_FUNDING_SATOSHIS`!
        pub fn new(our_network_key: SecretKey, fee_proportional_millionths: u32, announce_channels_publicly: bool, network: Network, feeest: Arc<FeeEstimator>, monitor: Arc<ManyChannelMonitor>, chain_monitor: Arc<ChainWatchInterface>, tx_broadcaster: Arc<BroadcasterInterface>, logger: Arc<Logger>) -> Result<Arc<ChannelManager>, secp256k1::Error> {
                let secp_ctx = Secp256k1::new();
@@ -307,12 +397,15 @@ impl ChannelManager {
        }
 
        /// Creates a new outbound channel to the given remote node and with the given value.
+       ///
        /// user_id will be provided back as user_channel_id in FundingGenerationReady and
        /// FundingBroadcastSafe events to allow tracking of which events correspond with which
        /// create_channel call. Note that user_channel_id defaults to 0 for inbound channels, so you
        /// may wish to avoid using 0 for user_id here.
+       ///
        /// If successful, will generate a SendOpenChannel event, so you should probably poll
        /// PeerManager::process_events afterwards.
+       ///
        /// Raises APIError::APIMisuseError when channel_value_satoshis > 2**24 or push_msat being greater than channel_value_satoshis * 1k
        pub fn create_channel(&self, their_network_key: PublicKey, channel_value_satoshis: u64, push_msat: u64, user_id: u64) -> Result<(), APIError> {
                let chan_keys = if cfg!(feature = "fuzztarget") {
@@ -336,11 +429,17 @@ impl ChannelManager {
                };
 
                let channel = Channel::new_outbound(&*self.fee_estimator, chan_keys, their_network_key, channel_value_satoshis, push_msat, self.announce_channels_publicly, user_id, Arc::clone(&self.logger))?;
-               let res = channel.get_open_channel(self.genesis_hash.clone(), &*self.fee_estimator)?;
+               let res = channel.get_open_channel(self.genesis_hash.clone(), &*self.fee_estimator);
                let mut channel_state = self.channel_state.lock().unwrap();
-               match channel_state.by_id.insert(channel.channel_id(), channel) {
-                       Some(_) => panic!("RNG is bad???"),
-                       None => {}
+               match channel_state.by_id.entry(channel.channel_id()) {
+                       hash_map::Entry::Occupied(_) => {
+                               if cfg!(feature = "fuzztarget") {
+                                       return Err(APIError::APIMisuseError { err: "Fuzzy bad RNG" });
+                               } else {
+                                       panic!("RNG is bad???");
+                               }
+                       },
+                       hash_map::Entry::Vacant(entry) => { entry.insert(channel); }
                }
 
                let mut events = self.pending_events.lock().unwrap();
@@ -374,7 +473,10 @@ impl ChannelManager {
                let channel_state = self.channel_state.lock().unwrap();
                let mut res = Vec::with_capacity(channel_state.by_id.len());
                for (channel_id, channel) in channel_state.by_id.iter() {
-                       if channel.is_usable() {
+                       // Note we use is_live here instead of usable which leads to somewhat confused
+                       // internal/external nomenclature, but that's ok cause that's probably what the user
+                       // really wanted anyway.
+                       if channel.is_live() {
                                res.push(ChannelDetails {
                                        channel_id: (*channel_id).clone(),
                                        short_channel_id: channel.get_short_channel_id(),
@@ -390,9 +492,10 @@ impl ChannelManager {
        /// Begins the process of closing a channel. After this call (plus some timeout), no new HTLCs
        /// will be accepted on the given channel, and after additional timeout/the closing of all
        /// pending HTLCs, the channel will be closed on chain.
+       ///
        /// May generate a SendShutdown event on success, which should be relayed.
-       pub fn close_channel(&self, channel_id: &[u8; 32]) -> Result<(), HandleError> {
-               let (res, node_id, chan_option) = {
+       pub fn close_channel(&self, channel_id: &[u8; 32]) -> Result<(), APIError> {
+               let (mut res, node_id, chan_option) = {
                        let mut channel_state_lock = self.channel_state.lock().unwrap();
                        let channel_state = channel_state_lock.borrow_parts();
                        match channel_state.by_id.entry(channel_id.clone()) {
@@ -405,12 +508,12 @@ impl ChannelManager {
                                                (res, chan_entry.get().get_their_node_id(), Some(chan_entry.remove_entry().1))
                                        } else { (res, chan_entry.get().get_their_node_id(), None) }
                                },
-                               hash_map::Entry::Vacant(_) => return Err(HandleError{err: "No such channel", action: None})
+                               hash_map::Entry::Vacant(_) => return Err(APIError::ChannelUnavailable{err: "No such channel"})
                        }
                };
-               for payment_hash in res.1 {
+               for htlc_source in res.1.drain(..) {
                        // unknown_next_peer...I dunno who that is anymore....
-                       self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), &payment_hash, HTLCFailReason::Reason { failure_code: 0x4000 | 10, data: Vec::new() });
+                       self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), htlc_source.0, &htlc_source.1, HTLCFailReason::Reason { failure_code: 0x4000 | 10, data: Vec::new() });
                }
                let chan_update = if let Some(chan) = chan_option {
                        if let Ok(update) = self.get_channel_update(&chan) {
@@ -433,11 +536,11 @@ impl ChannelManager {
        }
 
        #[inline]
-       fn finish_force_close_channel(&self, shutdown_res: (Vec<Transaction>, Vec<[u8; 32]>)) {
-               let (local_txn, failed_htlcs) = shutdown_res;
-               for payment_hash in failed_htlcs {
+       fn finish_force_close_channel(&self, shutdown_res: (Vec<Transaction>, Vec<(HTLCSource, [u8; 32])>)) {
+               let (local_txn, mut failed_htlcs) = shutdown_res;
+               for htlc_source in failed_htlcs.drain(..) {
                        // unknown_next_peer...I dunno who that is anymore....
-                       self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), &payment_hash, HTLCFailReason::Reason { failure_code: 0x4000 | 10, data: Vec::new() });
+                       self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), htlc_source.0, &htlc_source.1, HTLCFailReason::Reason { failure_code: 0x4000 | 10, data: Vec::new() });
                }
                for tx in local_txn {
                        self.tx_broadcaster.broadcast_transaction(&tx);
@@ -483,6 +586,33 @@ impl ChannelManager {
                }
        }
 
+       fn handle_monitor_update_fail(&self, mut channel_state_lock: MutexGuard<ChannelHolder>, channel_id: &[u8; 32], err: ChannelMonitorUpdateErr, reason: RAACommitmentOrder) {
+               match err {
+                       ChannelMonitorUpdateErr::PermanentFailure => {
+                               let mut chan = {
+                                       let channel_state = channel_state_lock.borrow_parts();
+                                       let chan = channel_state.by_id.remove(channel_id).expect("monitor_update_failed must be called within the same lock as the channel get!");
+                                       if let Some(short_id) = chan.get_short_channel_id() {
+                                               channel_state.short_to_id.remove(&short_id);
+                                       }
+                                       chan
+                               };
+                               mem::drop(channel_state_lock);
+                               self.finish_force_close_channel(chan.force_shutdown());
+                               let mut events = self.pending_events.lock().unwrap();
+                               if let Ok(update) = self.get_channel_update(&chan) {
+                                       events.push(events::Event::BroadcastChannelUpdate {
+                                               msg: update
+                                       });
+                               }
+                       },
+                       ChannelMonitorUpdateErr::TemporaryFailure => {
+                               let channel = channel_state_lock.by_id.get_mut(channel_id).expect("monitor_update_failed must be called within the same lock as the channel get!");
+                               channel.monitor_update_failed(reason);
+                       },
+               }
+       }
+
        #[inline]
        fn gen_rho_mu_from_shared_secret(shared_secret: &SharedSecret) -> ([u8; 32], [u8; 32]) {
                ({
@@ -567,7 +697,7 @@ impl ChannelManager {
        }
 
        /// returns the hop data, as well as the first-hop value_msat and CLTV value we should send.
-       fn build_onion_payloads(route: &Route, starting_htlc_offset: u32) -> Result<(Vec<msgs::OnionHopData>, u64, u32), HandleError> {
+       fn build_onion_payloads(route: &Route, starting_htlc_offset: u32) -> Result<(Vec<msgs::OnionHopData>, u64, u32), APIError> {
                let mut cur_value_msat = 0u64;
                let mut cur_cltv = starting_htlc_offset;
                let mut last_short_channel_id = 0;
@@ -592,11 +722,11 @@ impl ChannelManager {
                        };
                        cur_value_msat += hop.fee_msat;
                        if cur_value_msat >= 21000000 * 100000000 * 1000 {
-                               return Err(HandleError{err: "Channel fees overflowed?!", action: None});
+                               return Err(APIError::RouteError{err: "Channel fees overflowed?!"});
                        }
                        cur_cltv += hop.cltv_expiry_delta as u32;
                        if cur_cltv >= 500000000 {
-                               return Err(HandleError{err: "Channel CLTV overflowed?!", action: None});
+                               return Err(APIError::RouteError{err: "Channel CLTV overflowed?!"});
                        }
                        last_short_channel_id = hop.short_channel_id;
                }
@@ -623,7 +753,7 @@ impl ChannelManager {
        }
 
        const ZERO:[u8; 21*65] = [0; 21*65];
-       fn construct_onion_packet(mut payloads: Vec<msgs::OnionHopData>, onion_keys: Vec<OnionKeys>, associated_data: &[u8; 32]) -> Result<msgs::OnionPacket, HandleError> {
+       fn construct_onion_packet(mut payloads: Vec<msgs::OnionHopData>, onion_keys: Vec<OnionKeys>, associated_data: &[u8; 32]) -> msgs::OnionPacket {
                let mut buf = Vec::with_capacity(21*65);
                buf.resize(21*65, 0);
 
@@ -664,12 +794,12 @@ impl ChannelManager {
                        hmac.raw_result(&mut hmac_res);
                }
 
-               Ok(msgs::OnionPacket{
+               msgs::OnionPacket{
                        version: 0,
                        public_key: Ok(onion_keys.first().unwrap().ephemeral_pubkey),
                        hop_data: packet_data,
                        hmac: hmac_res,
-               })
+               }
        }
 
        /// Encrypts a failure packet. raw_packet can either be a
@@ -722,7 +852,7 @@ impl ChannelManager {
                ChannelManager::encrypt_failure_packet(shared_secret, &failure_packet.encode()[..])
        }
 
-       fn decode_update_add_htlc_onion(&self, msg: &msgs::UpdateAddHTLC) -> (PendingHTLCStatus, Option<SharedSecret>, MutexGuard<ChannelHolder>) {
+       fn decode_update_add_htlc_onion(&self, msg: &msgs::UpdateAddHTLC) -> (PendingHTLCStatus, MutexGuard<ChannelHolder>) {
                macro_rules! get_onion_hash {
                        () => {
                                {
@@ -742,7 +872,7 @@ impl ChannelManager {
                                htlc_id: msg.htlc_id,
                                sha256_of_onion: get_onion_hash!(),
                                failure_code: 0x8000 | 0x4000 | 6,
-                       })), None, self.channel_state.lock().unwrap());
+                       })), self.channel_state.lock().unwrap());
                }
 
                let shared_secret = SharedSecret::new(&self.secp_ctx, &msg.onion_routing_packet.public_key.unwrap(), &self.our_network_key);
@@ -760,7 +890,7 @@ impl ChannelManager {
                                                channel_id: msg.channel_id,
                                                htlc_id: msg.htlc_id,
                                                reason: ChannelManager::build_first_hop_failure_packet(&shared_secret, $err_code, $data),
-                                       })), Some(shared_secret), channel_state.unwrap());
+                                       })), channel_state.unwrap());
                                }
                        }
                }
@@ -786,10 +916,10 @@ impl ChannelManager {
                let next_hop_data = {
                        let mut decoded = [0; 65];
                        chacha.process(&msg.onion_routing_packet.hop_data[0..65], &mut decoded);
-                       match msgs::OnionHopData::decode(&decoded[..]) {
+                       match msgs::OnionHopData::read(&mut Cursor::new(&decoded[..])) {
                                Err(err) => {
                                        let error_code = match err {
-                                               msgs::DecodeError::UnknownRealmByte => 0x4000 | 1,
+                                               msgs::DecodeError::UnknownVersion => 0x4000 | 1, // unknown realm byte
                                                _ => 0x2000 | 2, // Should never happen
                                        };
                                        return_err!("Unable to decode our hop data", error_code, &[0;0]);
@@ -798,13 +928,17 @@ impl ChannelManager {
                        }
                };
 
-               //TODO: Check that msg.cltv_expiry is within acceptable bounds!
-
                let pending_forward_info = if next_hop_data.hmac == [0; 32] {
                                // OUR PAYMENT!
-                               if next_hop_data.data.amt_to_forward != msg.amount_msat {
+                               // final_expiry_too_soon
+                               if (msg.cltv_expiry as u64) < self.latest_block_height.load(Ordering::Acquire) as u64 + (CLTV_CLAIM_BUFFER + HTLC_FAIL_TIMEOUT_BLOCKS) as u64 {
+                                       return_err!("The final CLTV expiry is too soon to handle", 17, &[0;0]);
+                               }
+                               // final_incorrect_htlc_amount
+                               if next_hop_data.data.amt_to_forward > msg.amount_msat {
                                        return_err!("Upstream node sent less than we were supposed to receive in payment", 19, &byte_utils::be64_to_array(msg.amount_msat));
                                }
+                               // final_incorrect_cltv_expiry
                                if next_hop_data.data.outgoing_cltv_value != msg.cltv_expiry {
                                        return_err!("Upstream node set CLTV to the wrong value", 18, &byte_utils::be32_to_array(msg.cltv_expiry));
                                }
@@ -818,7 +952,7 @@ impl ChannelManager {
                                        onion_packet: None,
                                        payment_hash: msg.payment_hash.clone(),
                                        short_channel_id: 0,
-                                       prev_short_channel_id: 0,
+                                       incoming_shared_secret: shared_secret.clone(),
                                        amt_to_forward: next_hop_data.data.amt_to_forward,
                                        outgoing_cltv_value: next_hop_data.data.outgoing_cltv_value,
                                })
@@ -858,7 +992,7 @@ impl ChannelManager {
                                        onion_packet: Some(outgoing_packet),
                                        payment_hash: msg.payment_hash.clone(),
                                        short_channel_id: next_hop_data.data.short_channel_id,
-                                       prev_short_channel_id: 0,
+                                       incoming_shared_secret: shared_secret.clone(),
                                        amt_to_forward: next_hop_data.data.amt_to_forward,
                                        outgoing_cltv_value: next_hop_data.data.outgoing_cltv_value,
                                })
@@ -869,37 +1003,63 @@ impl ChannelManager {
                        if onion_packet.is_some() { // If short_channel_id is 0 here, we'll reject them in the body here
                                let id_option = channel_state.as_ref().unwrap().short_to_id.get(&short_channel_id).cloned();
                                let forwarding_id = match id_option {
-                                       None => {
+                                       None => { // unknown_next_peer
                                                return_err!("Don't have available channel for forwarding as requested.", 0x4000 | 10, &[0;0]);
                                        },
                                        Some(id) => id.clone(),
                                };
-                               if let Some((err, code, chan_update)) = {
+                               if let Some((err, code, chan_update)) = loop {
                                        let chan = channel_state.as_mut().unwrap().by_id.get_mut(&forwarding_id).unwrap();
-                                       if !chan.is_live() {
-                                               Some(("Forwarding channel is not in a ready state.", 0x1000 | 7, self.get_channel_update(chan).unwrap()))
-                                       } else {
-                                               let fee = amt_to_forward.checked_mul(self.fee_proportional_millionths as u64).and_then(|prop_fee| { (prop_fee / 1000000).checked_add(chan.get_our_fee_base_msat(&*self.fee_estimator) as u64) });
-                                               if fee.is_none() || msg.amount_msat < fee.unwrap() || (msg.amount_msat - fee.unwrap()) < *amt_to_forward {
-                                                       Some(("Prior hop has deviated from specified fees parameters or origin node has obsolete ones", 0x1000 | 12, self.get_channel_update(chan).unwrap()))
-                                               } else {
-                                                       if (msg.cltv_expiry as u64) < (*outgoing_cltv_value) as u64 + CLTV_EXPIRY_DELTA as u64 {
-                                                               Some(("Forwarding node has tampered with the intended HTLC values or origin node has an obsolete cltv_expiry_delta", 0x1000 | 13, self.get_channel_update(chan).unwrap()))
-                                                       } else {
-                                                               None
-                                                       }
-                                               }
+
+                                       // Note that we could technically not return an error yet here and just hope
+                                       // that the connection is reestablished or monitor updated by the time we get
+                                       // around to doing the actual forward, but better to fail early if we can and
+                                       // hopefully an attacker trying to path-trace payments cannot make this occur
+                                       // on a small/per-node/per-channel scale.
+                                       if !chan.is_live() { // channel_disabled
+                                               break Some(("Forwarding channel is not in a ready state.", 0x1000 | 20, Some(self.get_channel_update(chan).unwrap())));
+                                       }
+                                       if *amt_to_forward < chan.get_their_htlc_minimum_msat() { // amount_below_minimum
+                                               break Some(("HTLC amount was below the htlc_minimum_msat", 0x1000 | 11, Some(self.get_channel_update(chan).unwrap())));
+                                       }
+                                       let fee = amt_to_forward.checked_mul(self.fee_proportional_millionths as u64).and_then(|prop_fee| { (prop_fee / 1000000).checked_add(chan.get_our_fee_base_msat(&*self.fee_estimator) as u64) });
+                                       if fee.is_none() || msg.amount_msat < fee.unwrap() || (msg.amount_msat - fee.unwrap()) < *amt_to_forward { // fee_insufficient
+                                               break Some(("Prior hop has deviated from specified fees parameters or origin node has obsolete ones", 0x1000 | 12, Some(self.get_channel_update(chan).unwrap())));
+                                       }
+                                       if (msg.cltv_expiry as u64) < (*outgoing_cltv_value) as u64 + CLTV_EXPIRY_DELTA as u64 { // incorrect_cltv_expiry
+                                               break Some(("Forwarding node has tampered with the intended HTLC values or origin node has an obsolete cltv_expiry_delta", 0x1000 | 13, Some(self.get_channel_update(chan).unwrap())));
                                        }
-                               } {
-                                       return_err!(err, code, &chan_update.encode_with_len()[..]);
+                                       let cur_height = self.latest_block_height.load(Ordering::Acquire) as u32 + 1;
+                                       // We want to have at least HTLC_FAIL_TIMEOUT_BLOCKS to fail prior to going on chain CLAIM_BUFFER blocks before expiration
+                                       if msg.cltv_expiry <= cur_height + CLTV_CLAIM_BUFFER + HTLC_FAIL_TIMEOUT_BLOCKS as u32 { // expiry_too_soon
+                                               break Some(("CLTV expiry is too close", 0x1000 | 14, Some(self.get_channel_update(chan).unwrap())));
+                                       }
+                                       if msg.cltv_expiry > cur_height + CLTV_FAR_FAR_AWAY as u32 { // expiry_too_far
+                                               break Some(("CLTV expiry is too far in the future", 21, None));
+                                       }
+                                       break None;
+                               }
+                               {
+                                       let mut res = Vec::with_capacity(8 + 128);
+                                       if code == 0x1000 | 11 || code == 0x1000 | 12 {
+                                               res.extend_from_slice(&byte_utils::be64_to_array(msg.amount_msat));
+                                       }
+                                       else if code == 0x1000 | 13 {
+                                               res.extend_from_slice(&byte_utils::be32_to_array(msg.cltv_expiry));
+                                       }
+                                       if let Some(chan_update) = chan_update {
+                                               res.extend_from_slice(&chan_update.encode_with_len()[..]);
+                                       }
+                                       return_err!(err, code, &res[..]);
                                }
                        }
                }
 
-               (pending_forward_info, Some(shared_secret), channel_state.unwrap())
+               (pending_forward_info, channel_state.unwrap())
        }
 
        /// only fails if the channel does not yet have an assigned short_id
+       /// May be called with channel_state already locked!
        fn get_channel_update(&self, chan: &Channel) -> Result<msgs::ChannelUpdate, HandleError> {
                let short_channel_id = match chan.get_short_channel_id() {
                        None => return Err(HandleError{err: "Channel not yet established", action: None}),
@@ -921,7 +1081,7 @@ impl ChannelManager {
                };
 
                let msg_hash = Sha256dHash::from_data(&unsigned.encode()[..]);
-               let sig = self.secp_ctx.sign(&Message::from_slice(&msg_hash[..]).unwrap(), &self.our_network_key); //TODO Can we unwrap here?
+               let sig = self.secp_ctx.sign(&Message::from_slice(&msg_hash[..]).unwrap(), &self.our_network_key);
 
                Ok(msgs::ChannelUpdate {
                        signature: sig,
@@ -930,24 +1090,29 @@ impl ChannelManager {
        }
 
        /// Sends a payment along a given route.
+       ///
        /// Value parameters are provided via the last hop in route, see documentation for RouteHop
        /// fields for more info.
+       ///
        /// Note that if the payment_hash already exists elsewhere (eg you're sending a duplicative
        /// payment), we don't do anything to stop you! We always try to ensure that if the provided
        /// next hop knows the preimage to payment_hash they can claim an additional amount as
        /// specified in the last hop in the route! Thus, you should probably do your own
        /// payment_preimage tracking (which you should already be doing as they represent "proof of
        /// payment") and prevent double-sends yourself.
-       /// See-also docs on Channel::send_htlc_and_commit.
+       ///
        /// May generate a SendHTLCs event on success, which should be relayed.
-       pub fn send_payment(&self, route: Route, payment_hash: [u8; 32]) -> Result<(), HandleError> {
+       ///
+       /// Raises APIError::RoutError when invalid route or forward parameter
+       /// (cltv_delta, fee, node public key) is specified
+       pub fn send_payment(&self, route: Route, payment_hash: [u8; 32]) -> Result<(), APIError> {
                if route.hops.len() < 1 || route.hops.len() > 20 {
-                       return Err(HandleError{err: "Route didn't go anywhere/had bogus size", action: None});
+                       return Err(APIError::RouteError{err: "Route didn't go anywhere/had bogus size"});
                }
                let our_node_id = self.get_our_node_id();
                for (idx, hop) in route.hops.iter().enumerate() {
                        if idx != route.hops.len() - 1 && hop.pubkey == our_node_id {
-                               return Err(HandleError{err: "Route went through us but wasn't a simple rebalance loop to us", action: None});
+                               return Err(APIError::RouteError{err: "Route went through us but wasn't a simple rebalance loop to us"});
                        }
                }
 
@@ -959,52 +1124,59 @@ impl ChannelManager {
 
                let cur_height = self.latest_block_height.load(Ordering::Acquire) as u32 + 1;
 
-               //TODO: This should return something other than HandleError, that's really intended for
-               //p2p-returns only.
                let onion_keys = secp_call!(ChannelManager::construct_onion_keys(&self.secp_ctx, &route, &session_priv),
-                               HandleError{err: "Pubkey along hop was maliciously selected", action: Some(msgs::ErrorAction::IgnoreError)});
+                               APIError::RouteError{err: "Pubkey along hop was maliciously selected"});
                let (onion_payloads, htlc_msat, htlc_cltv) = ChannelManager::build_onion_payloads(&route, cur_height)?;
-               let onion_packet = ChannelManager::construct_onion_packet(onion_payloads, onion_keys, &payment_hash)?;
+               let onion_packet = ChannelManager::construct_onion_packet(onion_payloads, onion_keys, &payment_hash);
 
-               let (first_hop_node_id, (update_add, commitment_signed, chan_monitor)) = {
-                       let mut channel_state_lock = self.channel_state.lock().unwrap();
-                       let channel_state = channel_state_lock.borrow_parts();
+               let (first_hop_node_id, update_add, commitment_signed) = {
+                       let mut channel_state = self.channel_state.lock().unwrap();
 
                        let id = match channel_state.short_to_id.get(&route.hops.first().unwrap().short_channel_id) {
-                               None => return Err(HandleError{err: "No channel available with first hop!", action: None}),
-                               Some(id) => id.clone()
+                               None => return Err(APIError::ChannelUnavailable{err: "No channel available with first hop!"}),
+                               Some(id) => id.clone(),
                        };
 
-                       let claimable_htlc_entry = channel_state.claimable_htlcs.entry(payment_hash.clone());
-                       if let hash_map::Entry::Occupied(_) = claimable_htlc_entry {
-                               return Err(HandleError{err: "Already had pending HTLC with the same payment_hash", action: None});
-                       }
-
                        let res = {
-                               let chan = channel_state.by_id.get_mut(&id).unwrap();
-                               if chan.get_their_node_id() != route.hops.first().unwrap().pubkey {
-                                       return Err(HandleError{err: "Node ID mismatch on first hop!", action: None});
+                               let res = {
+                                       let chan = channel_state.by_id.get_mut(&id).unwrap();
+                                       if chan.get_their_node_id() != route.hops.first().unwrap().pubkey {
+                                               return Err(APIError::RouteError{err: "Node ID mismatch on first hop!"});
+                                       }
+                                       if chan.is_awaiting_monitor_update() {
+                                               return Err(APIError::MonitorUpdateFailed);
+                                       }
+                                       if !chan.is_live() {
+                                               return Err(APIError::ChannelUnavailable{err: "Peer for first hop currently disconnected!"});
+                                       }
+                                       chan.send_htlc_and_commit(htlc_msat, payment_hash.clone(), htlc_cltv, HTLCSource::OutboundRoute {
+                                               route: route.clone(),
+                                               session_priv: session_priv.clone(),
+                                               first_hop_htlc_msat: htlc_msat,
+                                       }, onion_packet).map_err(|he| APIError::ChannelUnavailable{err: he.err})?
+                               };
+                               match res {
+                                       Some((update_add, commitment_signed, chan_monitor)) => {
+                                               if let Err(e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
+                                                       self.handle_monitor_update_fail(channel_state, &id, e, RAACommitmentOrder::CommitmentFirst);
+                                                       return Err(APIError::MonitorUpdateFailed);
+                                               }
+                                               Some((update_add, commitment_signed))
+                                       },
+                                       None => None,
                                }
-                               chan.send_htlc_and_commit(htlc_msat, payment_hash, htlc_cltv, onion_packet)?
                        };
 
                        let first_hop_node_id = route.hops.first().unwrap().pubkey;
 
-                       claimable_htlc_entry.or_insert(PendingOutboundHTLC::OutboundRoute {
-                               route,
-                               session_priv,
-                       });
-
                        match res {
-                               Some(msgs) => (first_hop_node_id, msgs),
+                               Some((update_add, commitment_signed)) => {
+                                       (first_hop_node_id, update_add, commitment_signed)
+                               },
                                None => return Ok(()),
                        }
                };
 
-               if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
-                       unimplemented!(); // maybe remove from claimable_htlcs?
-               }
-
                let mut events = self.pending_events.lock().unwrap();
                events.push(events::Event::UpdateHTLCs {
                        node_id: first_hop_node_id,
@@ -1013,6 +1185,7 @@ impl ChannelManager {
                                update_fulfill_htlcs: Vec::new(),
                                update_fail_htlcs: Vec::new(),
                                update_fail_malformed_htlcs: Vec::new(),
+                               update_fee: None,
                                commitment_signed,
                        },
                });
@@ -1020,11 +1193,12 @@ impl ChannelManager {
        }
 
        /// Call this upon creation of a funding transaction for the given channel.
+       ///
        /// Panics if a funding transaction has already been provided for this channel.
+       ///
        /// May panic if the funding_txo is duplicative with some other channel (note that this should
        /// be trivially prevented by using unique funding transaction keys per-channel).
        pub fn funding_transaction_generated(&self, temporary_channel_id: &[u8; 32], funding_txo: OutPoint) {
-
                macro_rules! add_pending_event {
                        ($event: expr) => {
                                {
@@ -1055,9 +1229,11 @@ impl ChannelManager {
                                },
                                None => return
                        }
-               }; // Release channel lock for install_watch_outpoint call,
+               };
+               // Because we have exclusive ownership of the channel here we can release the channel_state
+               // lock before add_update_monitor
                if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
-                       unimplemented!(); // maybe remove from claimable_htlcs?
+                       unimplemented!();
                }
                add_pending_event!(events::Event::SendFundingCreated {
                        node_id: chan.get_their_node_id(),
@@ -1094,6 +1270,7 @@ impl ChannelManager {
        }
 
        /// Processes HTLCs which are pending waiting on random forward delay.
+       ///
        /// Should only really ever be called in response to an PendingHTLCsForwardable event.
        /// Will likely generate further events.
        pub fn process_pending_htlc_forwards(&self) {
@@ -1107,14 +1284,19 @@ impl ChannelManager {
                                return;
                        }
 
-                       for (short_chan_id, pending_forwards) in channel_state.forward_htlcs.drain() {
+                       for (short_chan_id, mut pending_forwards) in channel_state.forward_htlcs.drain() {
                                if short_chan_id != 0 {
                                        let forward_chan_id = match channel_state.short_to_id.get(&short_chan_id) {
                                                Some(chan_id) => chan_id.clone(),
                                                None => {
                                                        failed_forwards.reserve(pending_forwards.len());
-                                                       for forward_info in pending_forwards {
-                                                               failed_forwards.push((forward_info.payment_hash, 0x4000 | 10, None));
+                                                       for HTLCForwardInfo { prev_short_channel_id, prev_htlc_id, forward_info } in pending_forwards.drain(..) {
+                                                               let htlc_source = HTLCSource::PreviousHopData(HTLCPreviousHopData {
+                                                                       short_channel_id: prev_short_channel_id,
+                                                                       htlc_id: prev_htlc_id,
+                                                                       incoming_packet_shared_secret: forward_info.incoming_shared_secret,
+                                                               });
+                                                               failed_forwards.push((htlc_source, forward_info.payment_hash, 0x4000 | 10, None));
                                                        }
                                                        continue;
                                                }
@@ -1122,11 +1304,16 @@ impl ChannelManager {
                                        let forward_chan = &mut channel_state.by_id.get_mut(&forward_chan_id).unwrap();
 
                                        let mut add_htlc_msgs = Vec::new();
-                                       for forward_info in pending_forwards {
-                                               match forward_chan.send_htlc(forward_info.amt_to_forward, forward_info.payment_hash, forward_info.outgoing_cltv_value, forward_info.onion_packet.unwrap()) {
+                                       for HTLCForwardInfo { prev_short_channel_id, prev_htlc_id, forward_info } in pending_forwards.drain(..) {
+                                               let htlc_source = HTLCSource::PreviousHopData(HTLCPreviousHopData {
+                                                       short_channel_id: prev_short_channel_id,
+                                                       htlc_id: prev_htlc_id,
+                                                       incoming_packet_shared_secret: forward_info.incoming_shared_secret,
+                                               });
+                                               match forward_chan.send_htlc(forward_info.amt_to_forward, forward_info.payment_hash, forward_info.outgoing_cltv_value, htlc_source.clone(), forward_info.onion_packet.unwrap()) {
                                                        Err(_e) => {
                                                                let chan_update = self.get_channel_update(forward_chan).unwrap();
-                                                               failed_forwards.push((forward_info.payment_hash, 0x1000 | 7, Some(chan_update)));
+                                                               failed_forwards.push((htlc_source, forward_info.payment_hash, 0x1000 | 7, Some(chan_update)));
                                                                continue;
                                                        },
                                                        Ok(update_add) => {
@@ -1159,56 +1346,66 @@ impl ChannelManager {
                                                                continue;
                                                        },
                                                };
-                                               new_events.push((Some(monitor), events::Event::UpdateHTLCs {
+                                               if let Err(_e) = self.monitor.add_update_monitor(monitor.get_funding_txo().unwrap(), monitor) {
+                                                       unimplemented!();// but def dont push the event...
+                                               }
+                                               new_events.push(events::Event::UpdateHTLCs {
                                                        node_id: forward_chan.get_their_node_id(),
                                                        updates: msgs::CommitmentUpdate {
                                                                update_add_htlcs: add_htlc_msgs,
                                                                update_fulfill_htlcs: Vec::new(),
                                                                update_fail_htlcs: Vec::new(),
                                                                update_fail_malformed_htlcs: Vec::new(),
+                                                               update_fee: None,
                                                                commitment_signed: commitment_msg,
                                                        },
-                                               }));
+                                               });
                                        }
                                } else {
-                                       for forward_info in pending_forwards {
-                                               new_events.push((None, events::Event::PaymentReceived {
+                                       for HTLCForwardInfo { prev_short_channel_id, prev_htlc_id, forward_info } in pending_forwards.drain(..) {
+                                               let prev_hop_data = HTLCPreviousHopData {
+                                                       short_channel_id: prev_short_channel_id,
+                                                       htlc_id: prev_htlc_id,
+                                                       incoming_packet_shared_secret: forward_info.incoming_shared_secret,
+                                               };
+                                               match channel_state.claimable_htlcs.entry(forward_info.payment_hash) {
+                                                       hash_map::Entry::Occupied(mut entry) => entry.get_mut().push(prev_hop_data),
+                                                       hash_map::Entry::Vacant(entry) => { entry.insert(vec![prev_hop_data]); },
+                                               };
+                                               new_events.push(events::Event::PaymentReceived {
                                                        payment_hash: forward_info.payment_hash,
                                                        amt: forward_info.amt_to_forward,
-                                               }));
+                                               });
                                        }
                                }
                        }
                }
 
-               for failed_forward in failed_forwards.drain(..) {
-                       match failed_forward.2 {
-                               None => self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), &failed_forward.0, HTLCFailReason::Reason { failure_code: failed_forward.1, data: Vec::new() }),
-                               Some(chan_update) => self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), &failed_forward.0, HTLCFailReason::Reason { failure_code: failed_forward.1, data: chan_update.encode_with_len() }),
+               for (htlc_source, payment_hash, failure_code, update) in failed_forwards.drain(..) {
+                       match update {
+                               None => self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), htlc_source, &payment_hash, HTLCFailReason::Reason { failure_code, data: Vec::new() }),
+                               Some(chan_update) => self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), htlc_source, &payment_hash, HTLCFailReason::Reason { failure_code, data: chan_update.encode_with_len() }),
                        };
                }
 
                if new_events.is_empty() { return }
-
-               new_events.retain(|event| {
-                       if let &Some(ref monitor) = &event.0 {
-                               if let Err(_e) = self.monitor.add_update_monitor(monitor.get_funding_txo().unwrap(), monitor.clone()) {
-                                       unimplemented!();// but def dont push the event...
-                               }
-                       }
-                       true
-               });
-
                let mut events = self.pending_events.lock().unwrap();
-               events.reserve(new_events.len());
-               for event in new_events.drain(..) {
-                       events.push(event.1);
-               }
+               events.append(&mut new_events);
        }
 
        /// Indicates that the preimage for payment_hash is unknown after a PaymentReceived event.
        pub fn fail_htlc_backwards(&self, payment_hash: &[u8; 32]) -> bool {
-               self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), payment_hash, HTLCFailReason::Reason { failure_code: 0x4000 | 15, data: Vec::new() })
+               // TODO: Add ability to return 0x4000|16 (incorrect_payment_amount) if the amount we
+               // received is < expected or > 2*expected
+               let mut channel_state = Some(self.channel_state.lock().unwrap());
+               let removed_source = channel_state.as_mut().unwrap().claimable_htlcs.remove(payment_hash);
+               if let Some(mut sources) = removed_source {
+                       for htlc_with_hash in sources.drain(..) {
+                               if channel_state.is_none() { channel_state = Some(self.channel_state.lock().unwrap()); }
+                               self.fail_htlc_backwards_internal(channel_state.take().unwrap(), HTLCSource::PreviousHopData(htlc_with_hash), payment_hash, HTLCFailReason::Reason { failure_code: 0x4000 | 15, data: Vec::new() });
+                       }
+                       true
+               } else { false }
        }
 
        /// Fails an HTLC backwards to the sender of it to us.
@@ -1217,37 +1414,27 @@ impl ChannelManager {
        /// to fail and take the channel_state lock for each iteration (as we take ownership and may
        /// drop it). In other words, no assumptions are made that entries in claimable_htlcs point to
        /// still-available channels.
-       fn fail_htlc_backwards_internal(&self, mut channel_state: MutexGuard<ChannelHolder>, payment_hash: &[u8; 32], onion_error: HTLCFailReason) -> bool {
-               let mut pending_htlc = {
-                       match channel_state.claimable_htlcs.remove(payment_hash) {
-                               Some(pending_htlc) => pending_htlc,
-                               None => return false,
-                       }
-               };
-
-               match pending_htlc {
-                       PendingOutboundHTLC::CycledRoute { source_short_channel_id, incoming_packet_shared_secret, route, session_priv } => {
-                               channel_state.claimable_htlcs.insert(payment_hash.clone(), PendingOutboundHTLC::OutboundRoute {
-                                       route,
-                                       session_priv,
-                               });
-                               pending_htlc = PendingOutboundHTLC::IntermediaryHopData { source_short_channel_id, incoming_packet_shared_secret };
-                       },
-                       _ => {}
-               }
-
-               match pending_htlc {
-                       PendingOutboundHTLC::CycledRoute { .. } => unreachable!(),
-                       PendingOutboundHTLC::OutboundRoute { .. } => {
+       fn fail_htlc_backwards_internal(&self, mut channel_state: MutexGuard<ChannelHolder>, source: HTLCSource, payment_hash: &[u8; 32], onion_error: HTLCFailReason) {
+               match source {
+                       HTLCSource::OutboundRoute { .. } => {
                                mem::drop(channel_state);
-
-                               let mut pending_events = self.pending_events.lock().unwrap();
-                               pending_events.push(events::Event::PaymentFailed {
-                                       payment_hash: payment_hash.clone()
-                               });
-                               false
+                               if let &HTLCFailReason::ErrorPacket { ref err } = &onion_error {
+                                       let (channel_update, payment_retryable) = self.process_onion_failure(&source, err.data.clone());
+                                       let mut pending_events = self.pending_events.lock().unwrap();
+                                       if let Some(channel_update) = channel_update {
+                                               pending_events.push(events::Event::PaymentFailureNetworkUpdate {
+                                                       update: channel_update,
+                                               });
+                                       }
+                                       pending_events.push(events::Event::PaymentFailed {
+                                               payment_hash: payment_hash.clone(),
+                                               rejected_by_dest: !payment_retryable,
+                                       });
+                               } else {
+                                       panic!("should have onion error packet here");
+                               }
                        },
-                       PendingOutboundHTLC::IntermediaryHopData { source_short_channel_id, incoming_packet_shared_secret } => {
+                       HTLCSource::PreviousHopData(HTLCPreviousHopData { short_channel_id, htlc_id, incoming_packet_shared_secret }) => {
                                let err_packet = match onion_error {
                                        HTLCFailReason::Reason { failure_code, data } => {
                                                let packet = ChannelManager::build_failure_packet(&incoming_packet_shared_secret, failure_code, &data[..]).encode();
@@ -1259,29 +1446,31 @@ impl ChannelManager {
                                };
 
                                let (node_id, fail_msgs) = {
-                                       let chan_id = match channel_state.short_to_id.get(&source_short_channel_id) {
+                                       let chan_id = match channel_state.short_to_id.get(&short_channel_id) {
                                                Some(chan_id) => chan_id.clone(),
-                                               None => return false
+                                               None => return
                                        };
 
                                        let chan = channel_state.by_id.get_mut(&chan_id).unwrap();
-                                       match chan.get_update_fail_htlc_and_commit(payment_hash, err_packet) {
-                                               Ok(msg) => (chan.get_their_node_id(), msg),
+                                       match chan.get_update_fail_htlc_and_commit(htlc_id, err_packet) {
+                                               Ok(Some((msg, commitment_msg, chan_monitor))) => {
+                                                       if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
+                                                               unimplemented!();
+                                                       }
+                                                       (chan.get_their_node_id(), Some((msg, commitment_msg)))
+                                               },
+                                               Ok(None) => (chan.get_their_node_id(), None),
                                                Err(_e) => {
                                                        //TODO: Do something with e?
-                                                       return false;
+                                                       return;
                                                },
                                        }
                                };
 
                                match fail_msgs {
-                                       Some((msg, commitment_msg, chan_monitor)) => {
+                                       Some((msg, commitment_msg)) => {
                                                mem::drop(channel_state);
 
-                                               if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
-                                                       unimplemented!();// but def dont push the event...
-                                               }
-
                                                let mut pending_events = self.pending_events.lock().unwrap();
                                                pending_events.push(events::Event::UpdateHTLCs {
                                                        node_id,
@@ -1290,14 +1479,13 @@ impl ChannelManager {
                                                                update_fulfill_htlcs: Vec::new(),
                                                                update_fail_htlcs: vec![msg],
                                                                update_fail_malformed_htlcs: Vec::new(),
+                                                               update_fee: None,
                                                                commitment_signed: commitment_msg,
                                                        },
                                                });
                                        },
                                        None => {},
                                }
-
-                               true
                        },
                }
        }
@@ -1305,83 +1493,66 @@ impl ChannelManager {
        /// Provides a payment preimage in response to a PaymentReceived event, returning true and
        /// generating message events for the net layer to claim the payment, if possible. Thus, you
        /// should probably kick the net layer to go send messages if this returns true!
+       ///
        /// May panic if called except in response to a PaymentReceived event.
        pub fn claim_funds(&self, payment_preimage: [u8; 32]) -> bool {
-               self.claim_funds_internal(payment_preimage, true)
-       }
-       fn claim_funds_internal(&self, payment_preimage: [u8; 32], from_user: bool) -> bool {
                let mut sha = Sha256::new();
                sha.input(&payment_preimage);
                let mut payment_hash = [0; 32];
                sha.result(&mut payment_hash);
 
-               let mut channel_state = self.channel_state.lock().unwrap();
-               let mut pending_htlc = {
-                       match channel_state.claimable_htlcs.remove(&payment_hash) {
-                               Some(pending_htlc) => pending_htlc,
-                               None => return false,
+               let mut channel_state = Some(self.channel_state.lock().unwrap());
+               let removed_source = channel_state.as_mut().unwrap().claimable_htlcs.remove(&payment_hash);
+               if let Some(mut sources) = removed_source {
+                       for htlc_with_hash in sources.drain(..) {
+                               if channel_state.is_none() { channel_state = Some(self.channel_state.lock().unwrap()); }
+                               self.claim_funds_internal(channel_state.take().unwrap(), HTLCSource::PreviousHopData(htlc_with_hash), payment_preimage);
                        }
-               };
-
-               match pending_htlc {
-                       PendingOutboundHTLC::CycledRoute { source_short_channel_id, incoming_packet_shared_secret, route, session_priv } => {
-                               if from_user { // This was the end hop back to us
-                                       pending_htlc = PendingOutboundHTLC::IntermediaryHopData { source_short_channel_id, incoming_packet_shared_secret };
-                                       channel_state.claimable_htlcs.insert(payment_hash, PendingOutboundHTLC::OutboundRoute { route, session_priv });
-                               } else { // This came from the first upstream node
-                                       // Bank error in our favor! Maybe we should tell the user this somehow???
-                                       pending_htlc = PendingOutboundHTLC::OutboundRoute { route, session_priv };
-                                       channel_state.claimable_htlcs.insert(payment_hash, PendingOutboundHTLC::IntermediaryHopData { source_short_channel_id, incoming_packet_shared_secret });
-                               }
-                       },
-                       _ => {},
-               }
-
-               match pending_htlc {
-                       PendingOutboundHTLC::CycledRoute { .. } => unreachable!(),
-                       PendingOutboundHTLC::OutboundRoute { .. } => {
-                               if from_user {
-                                       panic!("Called claim_funds with a preimage for an outgoing payment. There is nothing we can do with this, and something is seriously wrong if you knew this...");
-                               }
+                       true
+               } else { false }
+       }
+       fn claim_funds_internal(&self, mut channel_state: MutexGuard<ChannelHolder>, source: HTLCSource, payment_preimage: [u8; 32]) {
+               match source {
+                       HTLCSource::OutboundRoute { .. } => {
                                mem::drop(channel_state);
                                let mut pending_events = self.pending_events.lock().unwrap();
                                pending_events.push(events::Event::PaymentSent {
                                        payment_preimage
                                });
-                               false
                        },
-                       PendingOutboundHTLC::IntermediaryHopData { source_short_channel_id, .. } => {
+                       HTLCSource::PreviousHopData(HTLCPreviousHopData { short_channel_id, htlc_id, .. }) => {
+                               //TODO: Delay the claimed_funds relaying just like we do outbound relay!
                                let (node_id, fulfill_msgs) = {
-                                       let chan_id = match channel_state.short_to_id.get(&source_short_channel_id) {
+                                       let chan_id = match channel_state.short_to_id.get(&short_channel_id) {
                                                Some(chan_id) => chan_id.clone(),
                                                None => {
                                                        // TODO: There is probably a channel manager somewhere that needs to
                                                        // learn the preimage as the channel already hit the chain and that's
                                                        // why its missing.
-                                                       return false
+                                                       return
                                                }
                                        };
 
                                        let chan = channel_state.by_id.get_mut(&chan_id).unwrap();
-                                       match chan.get_update_fulfill_htlc_and_commit(payment_preimage) {
-                                               Ok(msg) => (chan.get_their_node_id(), msg),
+                                       match chan.get_update_fulfill_htlc_and_commit(htlc_id, payment_preimage) {
+                                               Ok((msgs, Some(chan_monitor))) => {
+                                                       if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
+                                                               unimplemented!();// but def dont push the event...
+                                                       }
+                                                       (chan.get_their_node_id(), msgs)
+                                               },
+                                               Ok((msgs, None)) => (chan.get_their_node_id(), msgs),
                                                Err(_e) => {
                                                        // TODO: There is probably a channel manager somewhere that needs to
                                                        // learn the preimage as the channel may be about to hit the chain.
                                                        //TODO: Do something with e?
-                                                       return false;
+                                                       return
                                                },
                                        }
                                };
 
                                mem::drop(channel_state);
-                               if let Some(chan_monitor) = fulfill_msgs.1 {
-                                       if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
-                                               unimplemented!();// but def dont push the event...
-                                       }
-                               }
-
-                               if let Some((msg, commitment_msg)) = fulfill_msgs.0 {
+                               if let Some((msg, commitment_msg)) = fulfill_msgs {
                                        let mut pending_events = self.pending_events.lock().unwrap();
                                        pending_events.push(events::Event::UpdateHTLCs {
                                                node_id: node_id,
@@ -1390,11 +1561,11 @@ impl ChannelManager {
                                                        update_fulfill_htlcs: vec![msg],
                                                        update_fail_htlcs: Vec::new(),
                                                        update_fail_malformed_htlcs: Vec::new(),
+                                                       update_fee: None,
                                                        commitment_signed: commitment_msg,
                                                }
                                        });
                                }
-                               true
                        },
                }
        }
@@ -1408,7 +1579,83 @@ impl ChannelManager {
        /// ChannelMonitorUpdateErr::TemporaryFailure was returned from a channel monitor update
        /// operation.
        pub fn test_restore_channel_monitor(&self) {
-               unimplemented!();
+               let mut new_events = Vec::new();
+               let mut close_results = Vec::new();
+               let mut htlc_forwards = Vec::new();
+               let mut htlc_failures = Vec::new();
+
+               {
+                       let mut channel_lock = self.channel_state.lock().unwrap();
+                       let channel_state = channel_lock.borrow_parts();
+                       let short_to_id = channel_state.short_to_id;
+                       channel_state.by_id.retain(|_, channel| {
+                               if channel.is_awaiting_monitor_update() {
+                                       let chan_monitor = channel.channel_monitor();
+                                       if let Err(e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
+                                               match e {
+                                                       ChannelMonitorUpdateErr::PermanentFailure => {
+                                                               if let Some(short_id) = channel.get_short_channel_id() {
+                                                                       short_to_id.remove(&short_id);
+                                                               }
+                                                               close_results.push(channel.force_shutdown());
+                                                               if let Ok(update) = self.get_channel_update(&channel) {
+                                                                       new_events.push(events::Event::BroadcastChannelUpdate {
+                                                                               msg: update
+                                                                       });
+                                                               }
+                                                               false
+                                                       },
+                                                       ChannelMonitorUpdateErr::TemporaryFailure => true,
+                                               }
+                                       } else {
+                                               let (raa, commitment_update, order, pending_forwards, mut pending_failures) = channel.monitor_updating_restored();
+                                               if !pending_forwards.is_empty() {
+                                                       htlc_forwards.push((channel.get_short_channel_id().expect("We can't have pending forwards before funding confirmation"), pending_forwards));
+                                               }
+                                               htlc_failures.append(&mut pending_failures);
+
+                                               macro_rules! handle_cs { () => {
+                                                       if let Some(update) = commitment_update {
+                                                               new_events.push(events::Event::UpdateHTLCs {
+                                                                       node_id: channel.get_their_node_id(),
+                                                                       updates: update,
+                                                               });
+                                                       }
+                                               } }
+                                               macro_rules! handle_raa { () => {
+                                                       if let Some(revoke_and_ack) = raa {
+                                                               new_events.push(events::Event::SendRevokeAndACK {
+                                                                       node_id: channel.get_their_node_id(),
+                                                                       msg: revoke_and_ack,
+                                                               });
+                                                       }
+                                               } }
+                                               match order {
+                                                       RAACommitmentOrder::CommitmentFirst => {
+                                                               handle_cs!();
+                                                               handle_raa!();
+                                                       },
+                                                       RAACommitmentOrder::RevokeAndACKFirst => {
+                                                               handle_raa!();
+                                                               handle_cs!();
+                                                       },
+                                               }
+                                               true
+                                       }
+                               } else { true }
+                       });
+               }
+
+               for failure in htlc_failures.drain(..) {
+                       self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), failure.0, &failure.1, failure.2);
+               }
+               self.forward_htlcs(&mut htlc_forwards[..]);
+
+               for res in close_results.drain(..) {
+                       self.finish_force_close_channel(res);
+               }
+
+               self.pending_events.lock().unwrap().append(&mut new_events);
        }
 
        fn internal_open_channel(&self, their_node_id: &PublicKey, msg: &msgs::OpenChannel) -> Result<msgs::AcceptChannel, MsgHandleErrInternal> {
@@ -1440,7 +1687,8 @@ impl ChannelManager {
                        }
                };
 
-               let channel = Channel::new_from_req(&*self.fee_estimator, chan_keys, their_node_id.clone(), msg, 0, false, self.announce_channels_publicly, Arc::clone(&self.logger)).map_err(|e| MsgHandleErrInternal::from_no_close(e))?;
+               let channel = Channel::new_from_req(&*self.fee_estimator, chan_keys, their_node_id.clone(), msg, 0, false, self.announce_channels_publicly, Arc::clone(&self.logger))
+                       .map_err(|e| MsgHandleErrInternal::from_chan_no_close(e, msg.temporary_channel_id))?;
                let accept_msg = channel.get_accept_channel();
                channel_state.by_id.insert(channel.channel_id(), channel);
                Ok(accept_msg)
@@ -1455,7 +1703,8 @@ impl ChannelManager {
                                                //TODO: see issue #153, need a consistent behavior on obnoxious behavior from random node
                                                return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.temporary_channel_id));
                                        }
-                                       chan.accept_channel(&msg).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))?;
+                                       chan.accept_channel(&msg)
+                                               .map_err(|e| MsgHandleErrInternal::from_chan_maybe_close(e, msg.temporary_channel_id))?;
                                        (chan.get_value_satoshis(), chan.get_funding_redeemscript().to_v0_p2wsh(), chan.get_user_id())
                                },
                                //TODO: same as above
@@ -1492,10 +1741,9 @@ impl ChannelManager {
                                },
                                hash_map::Entry::Vacant(_) => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.temporary_channel_id))
                        }
-               }; // Release channel lock for install_watch_outpoint call,
-                  // note that this means if the remote end is misbehaving and sends a message for the same
-                  // channel back-to-back with funding_created, we'll end up thinking they sent a message
-                  // for a bogus channel.
+               };
+               // Because we have exclusive ownership of the channel here we can release the channel_state
+               // lock before add_update_monitor
                if let Err(_e) = self.monitor.add_update_monitor(monitor_update.get_funding_txo().unwrap(), monitor_update) {
                        unimplemented!();
                }
@@ -1512,7 +1760,7 @@ impl ChannelManager {
        }
 
        fn internal_funding_signed(&self, their_node_id: &PublicKey, msg: &msgs::FundingSigned) -> Result<(), MsgHandleErrInternal> {
-               let (funding_txo, user_id, monitor) = {
+               let (funding_txo, user_id) = {
                        let mut channel_state = self.channel_state.lock().unwrap();
                        match channel_state.by_id.get_mut(&msg.channel_id) {
                                Some(chan) => {
@@ -1521,14 +1769,14 @@ impl ChannelManager {
                                                return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
                                        }
                                        let chan_monitor = chan.funding_signed(&msg).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))?;
-                                       (chan.get_funding_txo().unwrap(), chan.get_user_id(), chan_monitor)
+                                       if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
+                                               unimplemented!();
+                                       }
+                                       (chan.get_funding_txo().unwrap(), chan.get_user_id())
                                },
                                None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
                        }
                };
-               if let Err(_e) = self.monitor.add_update_monitor(monitor.get_funding_txo().unwrap(), monitor) {
-                       unimplemented!();
-               }
                let mut pending_events = self.pending_events.lock().unwrap();
                pending_events.push(events::Event::FundingBroadcastSafe {
                        funding_txo: funding_txo,
@@ -1545,7 +1793,8 @@ impl ChannelManager {
                                        //TODO: here and below MsgHandleErrInternal, #153 case
                                        return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
                                }
-                               chan.funding_locked(&msg).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))?;
+                               chan.funding_locked(&msg)
+                                       .map_err(|e| MsgHandleErrInternal::from_chan_maybe_close(e, msg.channel_id))?;
                                return Ok(self.get_announcement_sigs(chan));
                        },
                        None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
@@ -1553,7 +1802,7 @@ impl ChannelManager {
        }
 
        fn internal_shutdown(&self, their_node_id: &PublicKey, msg: &msgs::Shutdown) -> Result<(Option<msgs::Shutdown>, Option<msgs::ClosingSigned>), MsgHandleErrInternal> {
-               let (res, chan_option) = {
+               let (mut res, chan_option) = {
                        let mut channel_state_lock = self.channel_state.lock().unwrap();
                        let channel_state = channel_state_lock.borrow_parts();
 
@@ -1574,9 +1823,9 @@ impl ChannelManager {
                                hash_map::Entry::Vacant(_) => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
                        }
                };
-               for payment_hash in res.2 {
+               for htlc_source in res.2.drain(..) {
                        // unknown_next_peer...I dunno who that is anymore....
-                       self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), &payment_hash, HTLCFailReason::Reason { failure_code: 0x4000 | 10, data: Vec::new() });
+                       self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), htlc_source.0, &htlc_source.1, HTLCFailReason::Reason { failure_code: 0x4000 | 10, data: Vec::new() });
                }
                if let Some(chan) = chan_option {
                        if let Ok(update) = self.get_channel_update(&chan) {
@@ -1639,38 +1888,10 @@ impl ChannelManager {
                //encrypted with the same key. Its not immediately obvious how to usefully exploit that,
                //but we should prevent it anyway.
 
-               let (mut pending_forward_info, shared_secret, mut channel_state_lock) = self.decode_update_add_htlc_onion(msg);
+               let (pending_forward_info, mut channel_state_lock) = self.decode_update_add_htlc_onion(msg);
                let channel_state = channel_state_lock.borrow_parts();
 
-               let claimable_htlcs_entry = channel_state.claimable_htlcs.entry(msg.payment_hash.clone());
-
-               // We dont correctly handle payments that route through us twice on their way to their
-               // destination. That's OK since those nodes are probably busted or trying to do network
-               // mapping through repeated loops. In either case, we want them to stop talking to us, so
-               // we send permanent_node_failure.
-               let mut will_forward = false;
-               if let PendingHTLCStatus::Forward(PendingForwardHTLCInfo { short_channel_id, .. }) = pending_forward_info {
-                       if let &hash_map::Entry::Occupied(ref e) = &claimable_htlcs_entry {
-                               let mut acceptable_cycle = false;
-                               if let &PendingOutboundHTLC::OutboundRoute { .. } = e.get() {
-                                       acceptable_cycle = short_channel_id == 0;
-                               }
-                               if !acceptable_cycle {
-                                       log_info!(self, "Failed to accept incoming HTLC: Payment looped through us twice");
-                                       pending_forward_info = PendingHTLCStatus::Fail(HTLCFailureMsg::Relay(msgs::UpdateFailHTLC {
-                                               channel_id: msg.channel_id,
-                                               htlc_id: msg.htlc_id,
-                                               reason: ChannelManager::build_first_hop_failure_packet(&shared_secret.unwrap(), 0x4000 | 0x2000 | 2, &[0;0]),
-                                       }));
-                               } else {
-                                       will_forward = true;
-                               }
-                       } else {
-                               will_forward = true;
-                       }
-               }
-
-               let (source_short_channel_id, res) = match channel_state.by_id.get_mut(&msg.channel_id) {
+               match channel_state.by_id.get_mut(&msg.channel_id) {
                        Some(chan) => {
                                if chan.get_their_node_id() != *their_node_id {
                                        //TODO: here MsgHandleErrInternal, #153 case
@@ -1679,140 +1900,227 @@ impl ChannelManager {
                                if !chan.is_usable() {
                                        return Err(MsgHandleErrInternal::from_no_close(HandleError{err: "Channel not yet available for receiving HTLCs", action: Some(msgs::ErrorAction::IgnoreError)}));
                                }
-                               let short_channel_id = chan.get_short_channel_id().unwrap();
-                               if let PendingHTLCStatus::Forward(ref mut forward_info) = pending_forward_info {
-                                       forward_info.prev_short_channel_id = short_channel_id;
-                               }
-                               (short_channel_id, chan.update_add_htlc(&msg, pending_forward_info).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))?)
+                               chan.update_add_htlc(&msg, pending_forward_info).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))
                        },
                        None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
-               };
-
-               if will_forward {
-                       match claimable_htlcs_entry {
-                               hash_map::Entry::Occupied(mut e) => {
-                                       let outbound_route = e.get_mut();
-                                       let (route, session_priv) = match outbound_route {
-                                               &mut PendingOutboundHTLC::OutboundRoute { ref route, ref session_priv } => {
-                                                       (route.clone(), session_priv.clone())
-                                               },
-                                               _ => unreachable!(),
-                                       };
-                                       *outbound_route = PendingOutboundHTLC::CycledRoute {
-                                               source_short_channel_id,
-                                               incoming_packet_shared_secret: shared_secret.unwrap(),
-                                               route,
-                                               session_priv,
-                                       };
-                               },
-                               hash_map::Entry::Vacant(e) => {
-                                       e.insert(PendingOutboundHTLC::IntermediaryHopData {
-                                               source_short_channel_id,
-                                               incoming_packet_shared_secret: shared_secret.unwrap(),
-                                       });
-                               }
-                       }
                }
-
-               Ok(res)
        }
 
        fn internal_update_fulfill_htlc(&self, their_node_id: &PublicKey, msg: &msgs::UpdateFulfillHTLC) -> Result<(), MsgHandleErrInternal> {
-               //TODO: Delay the claimed_funds relaying just like we do outbound relay!
-               // Claim funds first, cause we don't really care if the channel we received the message on
-               // is broken, we may have enough info to get our own money!
-               self.claim_funds_internal(msg.payment_preimage.clone(), false);
-
                let mut channel_state = self.channel_state.lock().unwrap();
-               match channel_state.by_id.get_mut(&msg.channel_id) {
+               let htlc_source = match channel_state.by_id.get_mut(&msg.channel_id) {
                        Some(chan) => {
                                if chan.get_their_node_id() != *their_node_id {
                                        //TODO: here and below MsgHandleErrInternal, #153 case
                                        return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
                                }
-                               chan.update_fulfill_htlc(&msg).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))
+                               chan.update_fulfill_htlc(&msg)
+                                       .map_err(|e| MsgHandleErrInternal::from_chan_maybe_close(e, msg.channel_id))?.clone()
                        },
                        None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
-               }
+               };
+               self.claim_funds_internal(channel_state, htlc_source, msg.payment_preimage.clone());
+               Ok(())
        }
 
-       fn internal_update_fail_htlc(&self, their_node_id: &PublicKey, msg: &msgs::UpdateFailHTLC) -> Result<Option<msgs::HTLCFailChannelUpdate>, MsgHandleErrInternal> {
-               let mut channel_state = self.channel_state.lock().unwrap();
-               let payment_hash = match channel_state.by_id.get_mut(&msg.channel_id) {
-                       Some(chan) => {
-                               if chan.get_their_node_id() != *their_node_id {
-                                       //TODO: here and below MsgHandleErrInternal, #153 case
-                                       return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
-                               }
-                               chan.update_fail_htlc(&msg, HTLCFailReason::ErrorPacket { err: msg.reason.clone() }).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))
-                       },
-                       None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
-               }?;
+       // Process failure we got back from upstream on a payment we sent. Returns update and a boolean
+       // indicating that the payment itself failed
+       fn process_onion_failure(&self, htlc_source: &HTLCSource, mut packet_decrypted: Vec<u8>) -> (Option<msgs::HTLCFailChannelUpdate>, bool) {
+               if let &HTLCSource::OutboundRoute { ref route, ref session_priv, ref first_hop_htlc_msat } = htlc_source {
+                       macro_rules! onion_failure_log {
+                               ( $error_code_textual: expr, $error_code: expr, $reported_name: expr, $reported_value: expr ) => {
+                                       log_trace!(self, "{}({:#x}) {}({})", $error_code_textual, $error_code, $reported_name, $reported_value);
+                               };
+                               ( $error_code_textual: expr, $error_code: expr ) => {
+                                       log_trace!(self, "{}({})", $error_code_textual, $error_code);
+                               };
+                       }
+
+                       const BADONION: u16 = 0x8000;
+                       const PERM: u16 = 0x4000;
+                       const UPDATE: u16 = 0x1000;
+
+                       let mut res = None;
+                       let mut htlc_msat = *first_hop_htlc_msat;
+
+                       // Handle packed channel/node updates for passing back for the route handler
+                       Self::construct_onion_keys_callback(&self.secp_ctx, route, session_priv, |shared_secret, _, _, route_hop| {
+                               if res.is_some() { return; }
+
+                               let incoming_htlc_msat = htlc_msat;
+                               let amt_to_forward = htlc_msat - route_hop.fee_msat;
+                               htlc_msat = amt_to_forward;
+
+                               let ammag = ChannelManager::gen_ammag_from_shared_secret(&shared_secret);
+
+                               let mut decryption_tmp = Vec::with_capacity(packet_decrypted.len());
+                               decryption_tmp.resize(packet_decrypted.len(), 0);
+                               let mut chacha = ChaCha20::new(&ammag, &[0u8; 8]);
+                               chacha.process(&packet_decrypted, &mut decryption_tmp[..]);
+                               packet_decrypted = decryption_tmp;
+
+                               let is_from_final_node = route.hops.last().unwrap().pubkey == route_hop.pubkey;
+
+                               if let Ok(err_packet) = msgs::DecodedOnionErrorPacket::read(&mut Cursor::new(&packet_decrypted)) {
+                                       let um = ChannelManager::gen_um_from_shared_secret(&shared_secret);
+                                       let mut hmac = Hmac::new(Sha256::new(), &um);
+                                       hmac.input(&err_packet.encode()[32..]);
+                                       let mut calc_tag = [0u8; 32];
+                                       hmac.raw_result(&mut calc_tag);
+
+                                       if crypto::util::fixed_time_eq(&calc_tag, &err_packet.hmac) {
+                                               if err_packet.failuremsg.len() < 2 {
+                                                       // Useless packet that we can't use but it passed HMAC, so it
+                                                       // definitely came from the peer in question
+                                                       res = Some((None, !is_from_final_node));
+                                               } else {
+                                                       let error_code = byte_utils::slice_to_be16(&err_packet.failuremsg[0..2]);
+
+                                                       match error_code & 0xff {
+                                                               1|2|3 => {
+                                                                       // either from an intermediate or final node
+                                                                       //   invalid_realm(PERM|1),
+                                                                       //   temporary_node_failure(NODE|2)
+                                                                       //   permanent_node_failure(PERM|NODE|2)
+                                                                       //   required_node_feature_mssing(PERM|NODE|3)
+                                                                       res = Some((Some(msgs::HTLCFailChannelUpdate::NodeFailure {
+                                                                               node_id: route_hop.pubkey,
+                                                                               is_permanent: error_code & PERM == PERM,
+                                                                       }), !(error_code & PERM == PERM && is_from_final_node)));
+                                                                       // node returning invalid_realm is removed from network_map,
+                                                                       // although NODE flag is not set, TODO: or remove channel only?
+                                                                       // retry payment when removed node is not a final node
+                                                                       return;
+                                                               },
+                                                               _ => {}
+                                                       }
+
+                                                       if is_from_final_node {
+                                                               let payment_retryable = match error_code {
+                                                                       c if c == PERM|15 => false, // unknown_payment_hash
+                                                                       c if c == PERM|16 => false, // incorrect_payment_amount
+                                                                       17 => true, // final_expiry_too_soon
+                                                                       18 if err_packet.failuremsg.len() == 6 => { // final_incorrect_cltv_expiry
+                                                                               let _reported_cltv_expiry = byte_utils::slice_to_be32(&err_packet.failuremsg[2..2+4]);
+                                                                               true
+                                                                       },
+                                                                       19 if err_packet.failuremsg.len() == 10 => { // final_incorrect_htlc_amount
+                                                                               let _reported_incoming_htlc_msat = byte_utils::slice_to_be64(&err_packet.failuremsg[2..2+8]);
+                                                                               true
+                                                                       },
+                                                                       _ => {
+                                                                               // A final node has sent us either an invalid code or an error_code that
+                                                                               // MUST be sent from the processing node, or the formmat of failuremsg
+                                                                               // does not coform to the spec.
+                                                                               // Remove it from the network map and don't may retry payment
+                                                                               res = Some((Some(msgs::HTLCFailChannelUpdate::NodeFailure {
+                                                                                       node_id: route_hop.pubkey,
+                                                                                       is_permanent: true,
+                                                                               }), false));
+                                                                               return;
+                                                                       }
+                                                               };
+                                                               res = Some((None, payment_retryable));
+                                                               return;
+                                                       }
 
-               if let Some(pending_htlc) = channel_state.claimable_htlcs.get(&payment_hash) {
-                       match pending_htlc {
-                               &PendingOutboundHTLC::OutboundRoute { ref route, ref session_priv } => {
-                                       // Handle packed channel/node updates for passing back for the route handler
-                                       let mut packet_decrypted = msg.reason.data.clone();
-                                       let mut res = None;
-                                       Self::construct_onion_keys_callback(&self.secp_ctx, &route, &session_priv, |shared_secret, _, _, route_hop| {
-                                               if res.is_some() { return; }
-
-                                               let ammag = ChannelManager::gen_ammag_from_shared_secret(&shared_secret);
-
-                                               let mut decryption_tmp = Vec::with_capacity(packet_decrypted.len());
-                                               decryption_tmp.resize(packet_decrypted.len(), 0);
-                                               let mut chacha = ChaCha20::new(&ammag, &[0u8; 8]);
-                                               chacha.process(&packet_decrypted, &mut decryption_tmp[..]);
-                                               packet_decrypted = decryption_tmp;
-
-                                               if let Ok(err_packet) = msgs::DecodedOnionErrorPacket::decode(&packet_decrypted) {
-                                                       if err_packet.failuremsg.len() >= 2 {
-                                                               let um = ChannelManager::gen_um_from_shared_secret(&shared_secret);
-
-                                                               let mut hmac = Hmac::new(Sha256::new(), &um);
-                                                               hmac.input(&err_packet.encode()[32..]);
-                                                               let mut calc_tag = [0u8; 32];
-                                                               hmac.raw_result(&mut calc_tag);
-                                                               if crypto::util::fixed_time_eq(&calc_tag, &err_packet.hmac) {
-                                                                       const UNKNOWN_CHAN: u16 = 0x4000|10;
-                                                                       const TEMP_CHAN_FAILURE: u16 = 0x4000|7;
-                                                                       match byte_utils::slice_to_be16(&err_packet.failuremsg[0..2]) {
-                                                                               TEMP_CHAN_FAILURE => {
-                                                                                       if err_packet.failuremsg.len() >= 4 {
-                                                                                               let update_len = byte_utils::slice_to_be16(&err_packet.failuremsg[2..4]) as usize;
-                                                                                               if err_packet.failuremsg.len() >= 4 + update_len {
-                                                                                                       if let Ok(chan_update) = msgs::ChannelUpdate::decode(&err_packet.failuremsg[4..4 + update_len]) {
-                                                                                                               res = Some(msgs::HTLCFailChannelUpdate::ChannelUpdateMessage {
-                                                                                                                       msg: chan_update,
-                                                                                                               });
+                                                       // now, error_code should be only from the intermediate nodes
+                                                       match error_code {
+                                                               _c if error_code & PERM == PERM => {
+                                                                       res = Some((Some(msgs::HTLCFailChannelUpdate::ChannelClosed {
+                                                                               short_channel_id: route_hop.short_channel_id,
+                                                                               is_permanent: true,
+                                                                       }), false));
+                                                               },
+                                                               _c if error_code & UPDATE == UPDATE => {
+                                                                       let offset = match error_code {
+                                                                               c if c == UPDATE|7  => 0, // temporary_channel_failure
+                                                                               c if c == UPDATE|11 => 8, // amount_below_minimum
+                                                                               c if c == UPDATE|12 => 8, // fee_insufficient
+                                                                               c if c == UPDATE|13 => 4, // incorrect_cltv_expiry
+                                                                               c if c == UPDATE|14 => 0, // expiry_too_soon
+                                                                               c if c == UPDATE|20 => 2, // channel_disabled
+                                                                               _ =>  {
+                                                                                       // node sending unknown code
+                                                                                       res = Some((Some(msgs::HTLCFailChannelUpdate::NodeFailure {
+                                                                                               node_id: route_hop.pubkey,
+                                                                                               is_permanent: true,
+                                                                                       }), false));
+                                                                                       return;
+                                                                               }
+                                                                       };
+
+                                                                       if err_packet.failuremsg.len() >= offset + 2 {
+                                                                               let update_len = byte_utils::slice_to_be16(&err_packet.failuremsg[offset+2..offset+4]) as usize;
+                                                                               if err_packet.failuremsg.len() >= offset + 4 + update_len {
+                                                                                       if let Ok(chan_update) = msgs::ChannelUpdate::read(&mut Cursor::new(&err_packet.failuremsg[offset + 4..offset + 4 + update_len])) {
+                                                                                               // if channel_update should NOT have caused the failure:
+                                                                                               // MAY treat the channel_update as invalid.
+                                                                                               let is_chan_update_invalid = match error_code {
+                                                                                                       c if c == UPDATE|7 => { // temporary_channel_failure
+                                                                                                               false
+                                                                                                       },
+                                                                                                       c if c == UPDATE|11 => { // amount_below_minimum
+                                                                                                               let reported_htlc_msat = byte_utils::slice_to_be64(&err_packet.failuremsg[2..2+8]);
+                                                                                                               onion_failure_log!("amount_below_minimum", UPDATE|11, "htlc_msat", reported_htlc_msat);
+                                                                                                               incoming_htlc_msat > chan_update.contents.htlc_minimum_msat
+                                                                                                       },
+                                                                                                       c if c == UPDATE|12 => { // fee_insufficient
+                                                                                                               let reported_htlc_msat = byte_utils::slice_to_be64(&err_packet.failuremsg[2..2+8]);
+                                                                                                               let new_fee =  amt_to_forward.checked_mul(chan_update.contents.fee_proportional_millionths as u64).and_then(|prop_fee| { (prop_fee / 1000000).checked_add(chan_update.contents.fee_base_msat as u64) });
+                                                                                                               onion_failure_log!("fee_insufficient", UPDATE|12, "htlc_msat", reported_htlc_msat);
+                                                                                                               new_fee.is_none() || incoming_htlc_msat >= new_fee.unwrap() && incoming_htlc_msat >= amt_to_forward + new_fee.unwrap()
                                                                                                        }
-                                                                                               }
+                                                                                                       c if c == UPDATE|13 => { // incorrect_cltv_expiry
+                                                                                                               let reported_cltv_expiry = byte_utils::slice_to_be32(&err_packet.failuremsg[2..2+4]);
+                                                                                                               onion_failure_log!("incorrect_cltv_expiry", UPDATE|13, "cltv_expiry", reported_cltv_expiry);
+                                                                                                               route_hop.cltv_expiry_delta as u16 >= chan_update.contents.cltv_expiry_delta
+                                                                                                       },
+                                                                                                       c if c == UPDATE|20 => { // channel_disabled
+                                                                                                               let reported_flags = byte_utils::slice_to_be16(&err_packet.failuremsg[2..2+2]);
+                                                                                                               onion_failure_log!("channel_disabled", UPDATE|20, "flags", reported_flags);
+                                                                                                               chan_update.contents.flags & 0x01 == 0x01
+                                                                                                       },
+                                                                                                       c if c == UPDATE|21 => true, // expiry_too_far
+                                                                                                       _ => { unreachable!(); },
+                                                                                               };
+
+                                                                                               let msg = if is_chan_update_invalid { None } else {
+                                                                                                       Some(msgs::HTLCFailChannelUpdate::ChannelUpdateMessage {
+                                                                                                               msg: chan_update,
+                                                                                                       })
+                                                                                               };
+                                                                                               res = Some((msg, true));
+                                                                                               return;
                                                                                        }
-                                                                               },
-                                                                               UNKNOWN_CHAN => {
-                                                                                       // No such next-hop. We know this came from the
-                                                                                       // current node as the HMAC validated.
-                                                                                       res = Some(msgs::HTLCFailChannelUpdate::ChannelClosed {
-                                                                                               short_channel_id: route_hop.short_channel_id
-                                                                                       });
-                                                                               },
-                                                                               _ => {}, //TODO: Enumerate all of these!
+                                                                               }
                                                                        }
+                                                               },
+                                                               _c if error_code & BADONION == BADONION => {
+                                                                       //TODO
+                                                               },
+                                                               14 => { // expiry_too_soon
+                                                                       res = Some((None, true));
+                                                                       return;
+                                                               }
+                                                               _ => {
+                                                                       // node sending unknown code
+                                                                       res = Some((Some(msgs::HTLCFailChannelUpdate::NodeFailure {
+                                                                               node_id: route_hop.pubkey,
+                                                                               is_permanent: true,
+                                                                       }), false));
+                                                                       return;
                                                                }
                                                        }
                                                }
-                                       }).unwrap();
-                                       Ok(res)
-                               },
-                               _ => { Ok(None) },
-                       }
-               } else {
-                       Ok(None)
-               }
+                                       }
+                               }
+                       }).expect("Route that we sent via spontaneously grew invalid keys in the middle of it?");
+                       res.unwrap_or((None, true))
+               } else { ((None, true)) }
        }
 
-       fn internal_update_fail_malformed_htlc(&self, their_node_id: &PublicKey, msg: &msgs::UpdateFailMalformedHTLC) -> Result<(), MsgHandleErrInternal> {
+       fn internal_update_fail_htlc(&self, their_node_id: &PublicKey, msg: &msgs::UpdateFailHTLC) -> Result<(), MsgHandleErrInternal> {
                let mut channel_state = self.channel_state.lock().unwrap();
                match channel_state.by_id.get_mut(&msg.channel_id) {
                        Some(chan) => {
@@ -1820,14 +2128,35 @@ impl ChannelManager {
                                        //TODO: here and below MsgHandleErrInternal, #153 case
                                        return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
                                }
-                               chan.update_fail_malformed_htlc(&msg, HTLCFailReason::Reason { failure_code: msg.failure_code, data: Vec::new() }).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))
+                               chan.update_fail_htlc(&msg, HTLCFailReason::ErrorPacket { err: msg.reason.clone() })
+                                       .map_err(|e| MsgHandleErrInternal::from_chan_maybe_close(e, msg.channel_id))
                        },
                        None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
-               }
+               }?;
+               Ok(())
+       }
+
+       fn internal_update_fail_malformed_htlc(&self, their_node_id: &PublicKey, msg: &msgs::UpdateFailMalformedHTLC) -> Result<(), MsgHandleErrInternal> {
+               let mut channel_state = self.channel_state.lock().unwrap();
+               match channel_state.by_id.get_mut(&msg.channel_id) {
+                       Some(chan) => {
+                               if chan.get_their_node_id() != *their_node_id {
+                                       //TODO: here and below MsgHandleErrInternal, #153 case
+                                       return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
+                               }
+                               if (msg.failure_code & 0x8000) != 0 {
+                                       return Err(MsgHandleErrInternal::send_err_msg_close_chan("Got update_fail_malformed_htlc with BADONION set", msg.channel_id));
+                               }
+                               chan.update_fail_malformed_htlc(&msg, HTLCFailReason::Reason { failure_code: msg.failure_code, data: Vec::new() })
+                                       .map_err(|e| MsgHandleErrInternal::from_chan_maybe_close(e, msg.channel_id))?;
+                               Ok(())
+                       },
+                       None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
+               }
        }
 
        fn internal_commitment_signed(&self, their_node_id: &PublicKey, msg: &msgs::CommitmentSigned) -> Result<(msgs::RevokeAndACK, Option<msgs::CommitmentSigned>), MsgHandleErrInternal> {
-               let (revoke_and_ack, commitment_signed, chan_monitor) = {
+               let (revoke_and_ack, commitment_signed) = {
                        let mut channel_state = self.channel_state.lock().unwrap();
                        match channel_state.by_id.get_mut(&msg.channel_id) {
                                Some(chan) => {
@@ -1835,20 +2164,53 @@ impl ChannelManager {
                                                //TODO: here and below MsgHandleErrInternal, #153 case
                                                return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
                                        }
-                                       chan.commitment_signed(&msg).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))?
+                                       let (revoke_and_ack, commitment_signed, chan_monitor) = chan.commitment_signed(&msg).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))?;
+                                       if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
+                                               unimplemented!();
+                                       }
+                                       (revoke_and_ack, commitment_signed)
                                },
                                None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
                        }
                };
-               if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
-                       unimplemented!();
-               }
-
                Ok((revoke_and_ack, commitment_signed))
        }
 
+       #[inline]
+       fn forward_htlcs(&self, per_source_pending_forwards: &mut [(u64, Vec<(PendingForwardHTLCInfo, u64)>)]) {
+               for &mut (prev_short_channel_id, ref mut pending_forwards) in per_source_pending_forwards {
+                       let mut forward_event = None;
+                       if !pending_forwards.is_empty() {
+                               let mut channel_state = self.channel_state.lock().unwrap();
+                               if channel_state.forward_htlcs.is_empty() {
+                                       forward_event = Some(Instant::now() + Duration::from_millis(((rng::rand_f32() * 4.0 + 1.0) * MIN_HTLC_RELAY_HOLDING_CELL_MILLIS as f32) as u64));
+                                       channel_state.next_forward = forward_event.unwrap();
+                               }
+                               for (forward_info, prev_htlc_id) in pending_forwards.drain(..) {
+                                       match channel_state.forward_htlcs.entry(forward_info.short_channel_id) {
+                                               hash_map::Entry::Occupied(mut entry) => {
+                                                       entry.get_mut().push(HTLCForwardInfo { prev_short_channel_id, prev_htlc_id, forward_info });
+                                               },
+                                               hash_map::Entry::Vacant(entry) => {
+                                                       entry.insert(vec!(HTLCForwardInfo { prev_short_channel_id, prev_htlc_id, forward_info }));
+                                               }
+                                       }
+                               }
+                       }
+                       match forward_event {
+                               Some(time) => {
+                                       let mut pending_events = self.pending_events.lock().unwrap();
+                                       pending_events.push(events::Event::PendingHTLCsForwardable {
+                                               time_forwardable: time
+                                       });
+                               }
+                               None => {},
+                       }
+               }
+       }
+
        fn internal_revoke_and_ack(&self, their_node_id: &PublicKey, msg: &msgs::RevokeAndACK) -> Result<Option<msgs::CommitmentUpdate>, MsgHandleErrInternal> {
-               let (res, mut pending_forwards, mut pending_failures, chan_monitor) = {
+               let ((res, pending_forwards, mut pending_failures), short_channel_id) = {
                        let mut channel_state = self.channel_state.lock().unwrap();
                        match channel_state.by_id.get_mut(&msg.channel_id) {
                                Some(chan) => {
@@ -1856,47 +2218,35 @@ impl ChannelManager {
                                                //TODO: here and below MsgHandleErrInternal, #153 case
                                                return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
                                        }
-                                       chan.revoke_and_ack(&msg).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))?
+                                       let (res, pending_forwards, pending_failures, chan_monitor) = chan.revoke_and_ack(&msg).map_err(|e| MsgHandleErrInternal::from_maybe_close(e))?;
+                                       if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
+                                               unimplemented!();
+                                       }
+                                       ((res, pending_forwards, pending_failures), chan.get_short_channel_id().expect("RAA should only work on a short-id-available channel"))
                                },
                                None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
                        }
                };
-               if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
-                       unimplemented!();
-               }
                for failure in pending_failures.drain(..) {
-                       self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), &failure.0, failure.1);
+                       self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), failure.0, &failure.1, failure.2);
                }
+               self.forward_htlcs(&mut [(short_channel_id, pending_forwards)]);
 
-               let mut forward_event = None;
-               if !pending_forwards.is_empty() {
-                       let mut channel_state = self.channel_state.lock().unwrap();
-                       if channel_state.forward_htlcs.is_empty() {
-                               forward_event = Some(Instant::now() + Duration::from_millis(((rng::rand_f32() * 4.0 + 1.0) * MIN_HTLC_RELAY_HOLDING_CELL_MILLIS as f32) as u64));
-                               channel_state.next_forward = forward_event.unwrap();
-                       }
-                       for forward_info in pending_forwards.drain(..) {
-                               match channel_state.forward_htlcs.entry(forward_info.short_channel_id) {
-                                       hash_map::Entry::Occupied(mut entry) => {
-                                               entry.get_mut().push(forward_info);
-                                       },
-                                       hash_map::Entry::Vacant(entry) => {
-                                               entry.insert(vec!(forward_info));
-                                       }
+               Ok(res)
+       }
+
+       fn internal_update_fee(&self, their_node_id: &PublicKey, msg: &msgs::UpdateFee) -> Result<(), MsgHandleErrInternal> {
+               let mut channel_state = self.channel_state.lock().unwrap();
+               match channel_state.by_id.get_mut(&msg.channel_id) {
+                       Some(chan) => {
+                               if chan.get_their_node_id() != *their_node_id {
+                                       //TODO: here and below MsgHandleErrInternal, #153 case
+                                       return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
                                }
-                       }
-               }
-               match forward_event {
-                       Some(time) => {
-                               let mut pending_events = self.pending_events.lock().unwrap();
-                               pending_events.push(events::Event::PendingHTLCsForwardable {
-                                       time_forwardable: time
-                               });
-                       }
-                       None => {},
+                               chan.update_fee(&*self.fee_estimator, &msg).map_err(|e| MsgHandleErrInternal::from_chan_maybe_close(e, msg.channel_id))
+                       },
+                       None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
                }
-
-               Ok(res)
        }
 
        fn internal_announcement_signatures(&self, their_node_id: &PublicKey, msg: &msgs::AnnouncementSignatures) -> Result<(), MsgHandleErrInternal> {
@@ -1913,7 +2263,7 @@ impl ChannelManager {
 
                                        let our_node_id = self.get_our_node_id();
                                        let (announcement, our_bitcoin_sig) = chan.get_channel_announcement(our_node_id.clone(), self.genesis_hash.clone())
-                                               .map_err(|e| MsgHandleErrInternal::from_maybe_close(e))?;
+                                               .map_err(|e| MsgHandleErrInternal::from_chan_maybe_close(e, msg.channel_id))?;
 
                                        let were_node_one = announcement.node_id_1 == our_node_id;
                                        let msghash = Message::from_slice(&Sha256dHash::from_data(&announcement.encode()[..])[..]).unwrap();
@@ -1939,7 +2289,70 @@ impl ChannelManager {
                Ok(())
        }
 
+       fn internal_channel_reestablish(&self, their_node_id: &PublicKey, msg: &msgs::ChannelReestablish) -> Result<(Option<msgs::FundingLocked>, Option<msgs::RevokeAndACK>, Option<msgs::CommitmentUpdate>, RAACommitmentOrder), MsgHandleErrInternal> {
+               let res = {
+                       let mut channel_state = self.channel_state.lock().unwrap();
+                       match channel_state.by_id.get_mut(&msg.channel_id) {
+                               Some(chan) => {
+                                       if chan.get_their_node_id() != *their_node_id {
+                                               return Err(MsgHandleErrInternal::send_err_msg_no_close("Got a message for a channel from the wrong node!", msg.channel_id));
+                                       }
+                                       let (funding_locked, revoke_and_ack, commitment_update, channel_monitor, order) = chan.channel_reestablish(msg)
+                                               .map_err(|e| MsgHandleErrInternal::from_chan_maybe_close(e, msg.channel_id))?;
+                                       if let Some(monitor) = channel_monitor {
+                                               if let Err(_e) = self.monitor.add_update_monitor(monitor.get_funding_txo().unwrap(), monitor) {
+                                                       unimplemented!();
+                                               }
+                                       }
+                                       Ok((funding_locked, revoke_and_ack, commitment_update, order))
+                               },
+                               None => return Err(MsgHandleErrInternal::send_err_msg_no_close("Failed to find corresponding channel", msg.channel_id))
+                       }
+               };
+
+               res
+       }
 
+       /// Begin Update fee process. Allowed only on an outbound channel.
+       /// If successful, will generate a UpdateHTLCs event, so you should probably poll
+       /// PeerManager::process_events afterwards.
+       /// Note: This API is likely to change!
+       #[doc(hidden)]
+       pub fn update_fee(&self, channel_id: [u8;32], feerate_per_kw: u64) -> Result<(), APIError> {
+               let mut channel_state = self.channel_state.lock().unwrap();
+               match channel_state.by_id.get_mut(&channel_id) {
+                       None => return Err(APIError::APIMisuseError{err: "Failed to find corresponding channel"}),
+                       Some(chan) => {
+                               if !chan.is_outbound() {
+                                       return Err(APIError::APIMisuseError{err: "update_fee cannot be sent for an inbound channel"});
+                               }
+                               if chan.is_awaiting_monitor_update() {
+                                       return Err(APIError::MonitorUpdateFailed);
+                               }
+                               if !chan.is_live() {
+                                       return Err(APIError::ChannelUnavailable{err: "Channel is either not yet fully established or peer is currently disconnected"});
+                               }
+                               if let Some((update_fee, commitment_signed, chan_monitor)) = chan.send_update_fee_and_commit(feerate_per_kw).map_err(|e| APIError::APIMisuseError{err: e.err})? {
+                                       if let Err(_e) = self.monitor.add_update_monitor(chan_monitor.get_funding_txo().unwrap(), chan_monitor) {
+                                               unimplemented!();
+                                       }
+                                       let mut pending_events = self.pending_events.lock().unwrap();
+                                       pending_events.push(events::Event::UpdateHTLCs {
+                                               node_id: chan.get_their_node_id(),
+                                               updates: msgs::CommitmentUpdate {
+                                                       update_add_htlcs: Vec::new(),
+                                                       update_fulfill_htlcs: Vec::new(),
+                                                       update_fail_htlcs: Vec::new(),
+                                                       update_fail_malformed_htlcs: Vec::new(),
+                                                       update_fee: Some(update_fee),
+                                                       commitment_signed,
+                                               },
+                                       });
+                               }
+                       },
+               }
+               Ok(())
+       }
 }
 
 impl events::EventsProvider for ChannelManager {
@@ -2136,7 +2549,7 @@ impl ChannelMessageHandler for ChannelManager {
                handle_error!(self, self.internal_update_fulfill_htlc(their_node_id, msg), their_node_id)
        }
 
-       fn handle_update_fail_htlc(&self, their_node_id: &PublicKey, msg: &msgs::UpdateFailHTLC) -> Result<Option<msgs::HTLCFailChannelUpdate>, HandleError> {
+       fn handle_update_fail_htlc(&self, their_node_id: &PublicKey, msg: &msgs::UpdateFailHTLC) -> Result<(), HandleError> {
                handle_error!(self, self.internal_update_fail_htlc(their_node_id, msg), their_node_id)
        }
 
@@ -2153,25 +2566,21 @@ impl ChannelMessageHandler for ChannelManager {
        }
 
        fn handle_update_fee(&self, their_node_id: &PublicKey, msg: &msgs::UpdateFee) -> Result<(), HandleError> {
-               let mut channel_state = self.channel_state.lock().unwrap();
-               match channel_state.by_id.get_mut(&msg.channel_id) {
-                       Some(chan) => {
-                               if chan.get_their_node_id() != *their_node_id {
-                                       return Err(HandleError{err: "Got a message for a channel from the wrong node!", action: None})
-                               }
-                               chan.update_fee(&*self.fee_estimator, &msg)
-                       },
-                       None => return Err(HandleError{err: "Failed to find corresponding channel", action: None})
-               }
+               handle_error!(self, self.internal_update_fee(their_node_id, msg), their_node_id)
        }
 
        fn handle_announcement_signatures(&self, their_node_id: &PublicKey, msg: &msgs::AnnouncementSignatures) -> Result<(), HandleError> {
                handle_error!(self, self.internal_announcement_signatures(their_node_id, msg), their_node_id)
        }
 
+       fn handle_channel_reestablish(&self, their_node_id: &PublicKey, msg: &msgs::ChannelReestablish) -> Result<(Option<msgs::FundingLocked>, Option<msgs::RevokeAndACK>, Option<msgs::CommitmentUpdate>, RAACommitmentOrder), HandleError> {
+               handle_error!(self, self.internal_channel_reestablish(their_node_id, msg), their_node_id)
+       }
+
        fn peer_disconnected(&self, their_node_id: &PublicKey, no_connection_possible: bool) {
                let mut new_events = Vec::new();
                let mut failed_channels = Vec::new();
+               let mut failed_payments = Vec::new();
                {
                        let mut channel_state_lock = self.channel_state.lock().unwrap();
                        let channel_state = channel_state_lock.borrow_parts();
@@ -2194,13 +2603,23 @@ impl ChannelMessageHandler for ChannelManager {
                                        }
                                });
                        } else {
-                               for chan in channel_state.by_id {
-                                       if chan.1.get_their_node_id() == *their_node_id {
-                                               //TODO: mark channel disabled (and maybe announce such after a timeout). Also
-                                               //fail and wipe any uncommitted outbound HTLCs as those are considered after
-                                               //reconnect.
+                               channel_state.by_id.retain(|_, chan| {
+                                       if chan.get_their_node_id() == *their_node_id {
+                                               //TODO: mark channel disabled (and maybe announce such after a timeout).
+                                               let failed_adds = chan.remove_uncommitted_htlcs_and_mark_paused();
+                                               if !failed_adds.is_empty() {
+                                                       let chan_update = self.get_channel_update(&chan).map(|u| u.encode_with_len()).unwrap(); // Cannot add/recv HTLCs before we have a short_id so unwrap is safe
+                                                       failed_payments.push((chan_update, failed_adds));
+                                               }
+                                               if chan.is_shutdown() {
+                                                       if let Some(short_id) = chan.get_short_channel_id() {
+                                                               short_to_id.remove(&short_id);
+                                                       }
+                                                       return false;
+                                               }
                                        }
-                               }
+                                       true
+                               })
                        }
                }
                for failure in failed_channels.drain(..) {
@@ -2212,6 +2631,32 @@ impl ChannelMessageHandler for ChannelManager {
                                pending_events.push(event);
                        }
                }
+               for (chan_update, mut htlc_sources) in failed_payments {
+                       for (htlc_source, payment_hash) in htlc_sources.drain(..) {
+                               self.fail_htlc_backwards_internal(self.channel_state.lock().unwrap(), htlc_source, &payment_hash, HTLCFailReason::Reason { failure_code: 0x1000 | 7, data: chan_update.clone() });
+                       }
+               }
+       }
+
+       fn peer_connected(&self, their_node_id: &PublicKey) -> Vec<msgs::ChannelReestablish> {
+               let mut res = Vec::new();
+               let mut channel_state = self.channel_state.lock().unwrap();
+               channel_state.by_id.retain(|_, chan| {
+                       if chan.get_their_node_id() == *their_node_id {
+                               if !chan.have_received_message() {
+                                       // If we created this (outbound) channel while we were disconnected from the
+                                       // peer we probably failed to send the open_channel message, which is now
+                                       // lost. We can't have had anything pending related to this channel, so we just
+                                       // drop it.
+                                       false
+                               } else {
+                                       res.push(chan.get_channel_reestablish());
+                                       true
+                               }
+                       } else { true }
+               });
+               //TODO: Also re-broadcast announcement_signatures
+               res
        }
 
        fn handle_error(&self, their_node_id: &PublicKey, msg: &msgs::ErrorMessage) {
@@ -2233,12 +2678,15 @@ mod tests {
        use chain::transaction::OutPoint;
        use chain::chaininterface::ChainListener;
        use ln::channelmanager::{ChannelManager,OnionKeys};
+       use ln::channelmonitor::{ChannelMonitorUpdateErr, CLTV_CLAIM_BUFFER, HTLC_FAIL_TIMEOUT_BLOCKS};
        use ln::router::{Route, RouteHop, Router};
        use ln::msgs;
-       use ln::msgs::{MsgEncodable,ChannelMessageHandler,RoutingMessageHandler};
+       use ln::msgs::{ChannelMessageHandler,RoutingMessageHandler};
        use util::test_utils;
        use util::events::{Event, EventsProvider};
+       use util::errors::APIError;
        use util::logger::Logger;
+       use util::ser::Writeable;
 
        use bitcoin::util::hash::Sha256dHash;
        use bitcoin::blockdata::block::{Block, BlockHeader};
@@ -2258,9 +2706,12 @@ mod tests {
 
        use rand::{thread_rng,Rng};
 
-       use std::collections::HashMap;
+       use std::cell::RefCell;
+       use std::collections::{BTreeSet, HashMap};
        use std::default::Default;
+       use std::rc::Rc;
        use std::sync::{Arc, Mutex};
+       use std::sync::atomic::Ordering;
        use std::time::Instant;
        use std::mem;
 
@@ -2384,7 +2835,7 @@ mod tests {
                        },
                );
 
-               let packet = ChannelManager::construct_onion_packet(payloads, onion_keys, &[0x42; 32]).unwrap();
+               let packet = ChannelManager::construct_onion_packet(payloads, onion_keys, &[0x42; 32]);
                // Just check the final packet encoding, as it includes all the per-hop vectors in it
                // anyway...
                assert_eq!(packet.encode(), hex::decode("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").unwrap());
@@ -2430,11 +2881,31 @@ mod tests {
                chan_monitor: Arc<test_utils::TestChannelMonitor>,
                node: Arc<ChannelManager>,
                router: Router,
+               network_payment_count: Rc<RefCell<u8>>,
+               network_chan_count: Rc<RefCell<u32>>,
+       }
+       impl Drop for Node {
+               fn drop(&mut self) {
+                       if !::std::thread::panicking() {
+                               // Check that we processed all pending events
+                               assert_eq!(self.node.get_and_clear_pending_events().len(), 0);
+                               assert_eq!(self.chan_monitor.added_monitors.lock().unwrap().len(), 0);
+                       }
+               }
        }
 
-       static mut CHAN_COUNT: u32 = 0;
        fn create_chan_between_nodes(node_a: &Node, node_b: &Node) -> (msgs::ChannelAnnouncement, msgs::ChannelUpdate, msgs::ChannelUpdate, [u8; 32], Transaction) {
-               node_a.node.create_channel(node_b.node.get_our_node_id(), 100000, 10001, 42).unwrap();
+               create_chan_between_nodes_with_value(node_a, node_b, 100000, 10001)
+       }
+
+       fn create_chan_between_nodes_with_value(node_a: &Node, node_b: &Node, channel_value: u64, push_msat: u64) -> (msgs::ChannelAnnouncement, msgs::ChannelUpdate, msgs::ChannelUpdate, [u8; 32], Transaction) {
+               let (funding_locked, channel_id, tx) = create_chan_between_nodes_with_value_a(node_a, node_b, channel_value, push_msat);
+               let (announcement, as_update, bs_update) = create_chan_between_nodes_with_value_b(node_a, node_b, &funding_locked);
+               (announcement, as_update, bs_update, channel_id, tx)
+       }
+
+       fn create_chan_between_nodes_with_value_init(node_a: &Node, node_b: &Node, channel_value: u64, push_msat: u64) -> Transaction {
+               node_a.node.create_channel(node_b.node.get_our_node_id(), channel_value, push_msat, 42).unwrap();
 
                let events_1 = node_a.node.get_and_clear_pending_events();
                assert_eq!(events_1.len(), 1);
@@ -2448,7 +2919,7 @@ mod tests {
 
                node_a.node.handle_accept_channel(&node_b.node.get_our_node_id(), &accept_chan).unwrap();
 
-               let chan_id = unsafe { CHAN_COUNT };
+               let chan_id = *node_a.network_chan_count.borrow();
                let tx;
                let funding_output;
 
@@ -2456,7 +2927,7 @@ mod tests {
                assert_eq!(events_2.len(), 1);
                match events_2[0] {
                        Event::FundingGenerationReady { ref temporary_channel_id, ref channel_value_satoshis, ref output_script, user_channel_id } => {
-                               assert_eq!(*channel_value_satoshis, 100000);
+                               assert_eq!(*channel_value_satoshis, channel_value);
                                assert_eq!(user_channel_id, 42);
 
                                tx = Transaction { version: chan_id as u32, lock_time: 0, input: Vec::new(), output: vec![TxOut {
@@ -2506,47 +2977,63 @@ mod tests {
                        _ => panic!("Unexpected event"),
                };
 
-               confirm_transaction(&node_a.chain_monitor, &tx, chan_id);
-               let events_5 = node_a.node.get_and_clear_pending_events();
+               tx
+       }
+
+       fn create_chan_between_nodes_with_value_confirm(node_a: &Node, node_b: &Node, tx: &Transaction) -> ((msgs::FundingLocked, msgs::AnnouncementSignatures), [u8; 32]) {
+               confirm_transaction(&node_b.chain_monitor, &tx, tx.version);
+               let events_5 = node_b.node.get_and_clear_pending_events();
                assert_eq!(events_5.len(), 1);
                match events_5[0] {
                        Event::SendFundingLocked { ref node_id, ref msg, ref announcement_sigs } => {
-                               assert_eq!(*node_id, node_b.node.get_our_node_id());
+                               assert_eq!(*node_id, node_a.node.get_our_node_id());
                                assert!(announcement_sigs.is_none());
-                               node_b.node.handle_funding_locked(&node_a.node.get_our_node_id(), msg).unwrap()
+                               node_a.node.handle_funding_locked(&node_b.node.get_our_node_id(), msg).unwrap()
                        },
                        _ => panic!("Unexpected event"),
                };
 
                let channel_id;
 
-               confirm_transaction(&node_b.chain_monitor, &tx, chan_id);
-               let events_6 = node_b.node.get_and_clear_pending_events();
+               confirm_transaction(&node_a.chain_monitor, &tx, tx.version);
+               let events_6 = node_a.node.get_and_clear_pending_events();
                assert_eq!(events_6.len(), 1);
-               let as_announcement_sigs = match events_6[0] {
+               (match events_6[0] {
                        Event::SendFundingLocked { ref node_id, ref msg, ref announcement_sigs } => {
-                               assert_eq!(*node_id, node_a.node.get_our_node_id());
                                channel_id = msg.channel_id.clone();
-                               let as_announcement_sigs = node_a.node.handle_funding_locked(&node_b.node.get_our_node_id(), msg).unwrap().unwrap();
-                               node_a.node.handle_announcement_signatures(&node_b.node.get_our_node_id(), &(*announcement_sigs).clone().unwrap()).unwrap();
-                               as_announcement_sigs
+                               assert_eq!(*node_id, node_b.node.get_our_node_id());
+                               (msg.clone(), announcement_sigs.clone().unwrap())
                        },
                        _ => panic!("Unexpected event"),
+               }, channel_id)
+       }
+
+       fn create_chan_between_nodes_with_value_a(node_a: &Node, node_b: &Node, channel_value: u64, push_msat: u64) -> ((msgs::FundingLocked, msgs::AnnouncementSignatures), [u8; 32], Transaction) {
+               let tx = create_chan_between_nodes_with_value_init(node_a, node_b, channel_value, push_msat);
+               let (msgs, chan_id) = create_chan_between_nodes_with_value_confirm(node_a, node_b, &tx);
+               (msgs, chan_id, tx)
+       }
+
+       fn create_chan_between_nodes_with_value_b(node_a: &Node, node_b: &Node, as_funding_msgs: &(msgs::FundingLocked, msgs::AnnouncementSignatures)) -> (msgs::ChannelAnnouncement, msgs::ChannelUpdate, msgs::ChannelUpdate) {
+               let bs_announcement_sigs = {
+                       let bs_announcement_sigs = node_b.node.handle_funding_locked(&node_a.node.get_our_node_id(), &as_funding_msgs.0).unwrap().unwrap();
+                       node_b.node.handle_announcement_signatures(&node_a.node.get_our_node_id(), &as_funding_msgs.1).unwrap();
+                       bs_announcement_sigs
                };
 
-               let events_7 = node_a.node.get_and_clear_pending_events();
+               let events_7 = node_b.node.get_and_clear_pending_events();
                assert_eq!(events_7.len(), 1);
-               let (announcement, as_update) = match events_7[0] {
+               let (announcement, bs_update) = match events_7[0] {
                        Event::BroadcastChannelAnnouncement { ref msg, ref update_msg } => {
                                (msg, update_msg)
                        },
                        _ => panic!("Unexpected event"),
                };
 
-               node_b.node.handle_announcement_signatures(&node_a.node.get_our_node_id(), &as_announcement_sigs).unwrap();
-               let events_8 = node_b.node.get_and_clear_pending_events();
+               node_a.node.handle_announcement_signatures(&node_b.node.get_our_node_id(), &bs_announcement_sigs).unwrap();
+               let events_8 = node_a.node.get_and_clear_pending_events();
                assert_eq!(events_8.len(), 1);
-               let bs_update = match events_8[0] {
+               let as_update = match events_8[0] {
                        Event::BroadcastChannelAnnouncement { ref msg, ref update_msg } => {
                                assert!(*announcement == *msg);
                                update_msg
@@ -2554,15 +3041,17 @@ mod tests {
                        _ => panic!("Unexpected event"),
                };
 
-               unsafe {
-                       CHAN_COUNT += 1;
-               }
+               *node_a.network_chan_count.borrow_mut() += 1;
 
-               ((*announcement).clone(), (*as_update).clone(), (*bs_update).clone(), channel_id, tx)
+               ((*announcement).clone(), (*as_update).clone(), (*bs_update).clone())
        }
 
        fn create_announced_chan_between_nodes(nodes: &Vec<Node>, a: usize, b: usize) -> (msgs::ChannelUpdate, msgs::ChannelUpdate, [u8; 32], Transaction) {
-               let chan_announcement = create_chan_between_nodes(&nodes[a], &nodes[b]);
+               create_announced_chan_between_nodes_with_value(nodes, a, b, 100000, 10001)
+       }
+
+       fn create_announced_chan_between_nodes_with_value(nodes: &Vec<Node>, a: usize, b: usize, channel_value: u64, push_msat: u64) -> (msgs::ChannelUpdate, msgs::ChannelUpdate, [u8; 32], Transaction) {
+               let chan_announcement = create_chan_between_nodes_with_value(&nodes[a], &nodes[b], channel_value, push_msat);
                for node in nodes {
                        assert!(node.router.handle_channel_announcement(&chan_announcement.0).unwrap());
                        node.router.handle_channel_update(&chan_announcement.1).unwrap();
@@ -2571,6 +3060,17 @@ mod tests {
                (chan_announcement.1, chan_announcement.2, chan_announcement.3, chan_announcement.4)
        }
 
+       macro_rules! check_spends {
+               ($tx: expr, $spends_tx: expr) => {
+                       {
+                               let mut funding_tx_map = HashMap::new();
+                               let spends_tx = $spends_tx;
+                               funding_tx_map.insert(spends_tx.txid(), spends_tx);
+                               $tx.verify(&funding_tx_map).unwrap();
+                       }
+               }
+       }
+
        fn close_channel(outbound_node: &Node, inbound_node: &Node, channel_id: &[u8; 32], funding_tx: Transaction, close_inbound_first: bool) -> (msgs::ChannelUpdate, msgs::ChannelUpdate) {
                let (node_a, broadcaster_a) = if close_inbound_first { (&inbound_node.node, &inbound_node.tx_broadcaster) } else { (&outbound_node.node, &outbound_node.tx_broadcaster) };
                let (node_b, broadcaster_b) = if close_inbound_first { (&outbound_node.node, &outbound_node.tx_broadcaster) } else { (&inbound_node.node, &inbound_node.tx_broadcaster) };
@@ -2614,9 +3114,7 @@ mod tests {
                        tx_a = broadcaster_a.txn_broadcasted.lock().unwrap().remove(0);
                }
                assert_eq!(tx_a, tx_b);
-               let mut funding_tx_map = HashMap::new();
-               funding_tx_map.insert(funding_tx.txid(), funding_tx);
-               tx_a.verify(&funding_tx_map).unwrap();
+               check_spends!(tx_a, funding_tx);
 
                let events_2 = node_a.get_and_clear_pending_events();
                assert_eq!(events_2.len(), 1);
@@ -2645,38 +3143,82 @@ mod tests {
                commitment_msg: msgs::CommitmentSigned,
        }
        impl SendEvent {
+               fn from_commitment_update(node_id: PublicKey, updates: msgs::CommitmentUpdate) -> SendEvent {
+                       assert!(updates.update_fulfill_htlcs.is_empty());
+                       assert!(updates.update_fail_htlcs.is_empty());
+                       assert!(updates.update_fail_malformed_htlcs.is_empty());
+                       assert!(updates.update_fee.is_none());
+                       SendEvent { node_id: node_id, msgs: updates.update_add_htlcs, commitment_msg: updates.commitment_signed }
+               }
+
                fn from_event(event: Event) -> SendEvent {
                        match event {
-                               Event::UpdateHTLCs { node_id, updates: msgs::CommitmentUpdate { update_add_htlcs, update_fulfill_htlcs, update_fail_htlcs, update_fail_malformed_htlcs, commitment_signed } } => {
-                                       assert!(update_fulfill_htlcs.is_empty());
-                                       assert!(update_fail_htlcs.is_empty());
-                                       assert!(update_fail_malformed_htlcs.is_empty());
-                                       SendEvent { node_id: node_id, msgs: update_add_htlcs, commitment_msg: commitment_signed }
-                               },
+                               Event::UpdateHTLCs { node_id, updates } => SendEvent::from_commitment_update(node_id, updates),
                                _ => panic!("Unexpected event type!"),
                        }
                }
        }
 
-       static mut PAYMENT_COUNT: u8 = 0;
+       macro_rules! check_added_monitors {
+               ($node: expr, $count: expr) => {
+                       {
+                               let mut added_monitors = $node.chan_monitor.added_monitors.lock().unwrap();
+                               assert_eq!(added_monitors.len(), $count);
+                               added_monitors.clear();
+                       }
+               }
+       }
+
+       macro_rules! commitment_signed_dance {
+               ($node_a: expr, $node_b: expr, $commitment_signed: expr, $fail_backwards: expr) => {
+                       {
+                               check_added_monitors!($node_a, 0);
+                               let (as_revoke_and_ack, as_commitment_signed) = $node_a.node.handle_commitment_signed(&$node_b.node.get_our_node_id(), &$commitment_signed).unwrap();
+                               check_added_monitors!($node_a, 1);
+                               check_added_monitors!($node_b, 0);
+                               assert!($node_b.node.handle_revoke_and_ack(&$node_a.node.get_our_node_id(), &as_revoke_and_ack).unwrap().is_none());
+                               check_added_monitors!($node_b, 1);
+                               let (bs_revoke_and_ack, bs_none) = $node_b.node.handle_commitment_signed(&$node_a.node.get_our_node_id(), &as_commitment_signed.unwrap()).unwrap();
+                               assert!(bs_none.is_none());
+                               check_added_monitors!($node_b, 1);
+                               if $fail_backwards {
+                                       assert!($node_a.node.get_and_clear_pending_events().is_empty());
+                               }
+                               assert!($node_a.node.handle_revoke_and_ack(&$node_b.node.get_our_node_id(), &bs_revoke_and_ack).unwrap().is_none());
+                               {
+                                       let mut added_monitors = $node_a.chan_monitor.added_monitors.lock().unwrap();
+                                       if $fail_backwards {
+                                               assert_eq!(added_monitors.len(), 2);
+                                               assert!(added_monitors[0].0 != added_monitors[1].0);
+                                       } else {
+                                               assert_eq!(added_monitors.len(), 1);
+                                       }
+                                       added_monitors.clear();
+                               }
+                       }
+               }
+       }
+
+       macro_rules! get_payment_preimage_hash {
+               ($node: expr) => {
+                       {
+                               let payment_preimage = [*$node.network_payment_count.borrow(); 32];
+                               *$node.network_payment_count.borrow_mut() += 1;
+                               let mut payment_hash = [0; 32];
+                               let mut sha = Sha256::new();
+                               sha.input(&payment_preimage[..]);
+                               sha.result(&mut payment_hash);
+                               (payment_preimage, payment_hash)
+                       }
+               }
+       }
+
        fn send_along_route(origin_node: &Node, route: Route, expected_route: &[&Node], recv_value: u64) -> ([u8; 32], [u8; 32]) {
-               let our_payment_preimage = unsafe { [PAYMENT_COUNT; 32] };
-               unsafe { PAYMENT_COUNT += 1 };
-               let our_payment_hash = {
-                       let mut sha = Sha256::new();
-                       sha.input(&our_payment_preimage[..]);
-                       let mut ret = [0; 32];
-                       sha.result(&mut ret);
-                       ret
-               };
+               let (our_payment_preimage, our_payment_hash) = get_payment_preimage_hash!(origin_node);
 
                let mut payment_event = {
                        origin_node.node.send_payment(route, our_payment_hash).unwrap();
-                       {
-                               let mut added_monitors = origin_node.chan_monitor.added_monitors.lock().unwrap();
-                               assert_eq!(added_monitors.len(), 1);
-                               added_monitors.clear();
-                       }
+                       check_added_monitors!(origin_node, 1);
 
                        let mut events = origin_node.node.get_and_clear_pending_events();
                        assert_eq!(events.len(), 1);
@@ -2688,31 +3230,8 @@ mod tests {
                        assert_eq!(node.node.get_our_node_id(), payment_event.node_id);
 
                        node.node.handle_update_add_htlc(&prev_node.node.get_our_node_id(), &payment_event.msgs[0]).unwrap();
-                       {
-                               let added_monitors = node.chan_monitor.added_monitors.lock().unwrap();
-                               assert_eq!(added_monitors.len(), 0);
-                       }
-
-                       let revoke_and_ack = node.node.handle_commitment_signed(&prev_node.node.get_our_node_id(), &payment_event.commitment_msg).unwrap();
-                       {
-                               let mut added_monitors = node.chan_monitor.added_monitors.lock().unwrap();
-                               assert_eq!(added_monitors.len(), 1);
-                               added_monitors.clear();
-                       }
-                       assert!(prev_node.node.handle_revoke_and_ack(&node.node.get_our_node_id(), &revoke_and_ack.0).unwrap().is_none());
-                       let prev_revoke_and_ack = prev_node.node.handle_commitment_signed(&node.node.get_our_node_id(), &revoke_and_ack.1.unwrap()).unwrap();
-                       {
-                               let mut added_monitors = prev_node.chan_monitor.added_monitors.lock().unwrap();
-                               assert_eq!(added_monitors.len(), 2);
-                               added_monitors.clear();
-                       }
-                       assert!(node.node.handle_revoke_and_ack(&prev_node.node.get_our_node_id(), &prev_revoke_and_ack.0).unwrap().is_none());
-                       assert!(prev_revoke_and_ack.1.is_none());
-                       {
-                               let mut added_monitors = node.chan_monitor.added_monitors.lock().unwrap();
-                               assert_eq!(added_monitors.len(), 1);
-                               added_monitors.clear();
-                       }
+                       check_added_monitors!(node, 0);
+                       commitment_signed_dance!(node, prev_node, payment_event.commitment_msg, false);
 
                        let events_1 = node.node.get_and_clear_pending_events();
                        assert_eq!(events_1.len(), 1);
@@ -2735,11 +3254,7 @@ mod tests {
                                        _ => panic!("Unexpected event"),
                                }
                        } else {
-                               {
-                                       let mut added_monitors = node.chan_monitor.added_monitors.lock().unwrap();
-                                       assert_eq!(added_monitors.len(), 1);
-                                       added_monitors.clear();
-                               }
+                               check_added_monitors!(node, 1);
                                payment_event = SendEvent::from_event(events_2.remove(0));
                                assert_eq!(payment_event.msgs.len(), 1);
                        }
@@ -2750,88 +3265,73 @@ mod tests {
                (our_payment_preimage, our_payment_hash)
        }
 
-       fn claim_payment(origin_node: &Node, expected_route: &[&Node], our_payment_preimage: [u8; 32]) {
+       fn claim_payment_along_route(origin_node: &Node, expected_route: &[&Node], skip_last: bool, our_payment_preimage: [u8; 32]) {
                assert!(expected_route.last().unwrap().node.claim_funds(our_payment_preimage));
-               {
-                       let mut added_monitors = expected_route.last().unwrap().chan_monitor.added_monitors.lock().unwrap();
-                       assert_eq!(added_monitors.len(), 1);
-                       added_monitors.clear();
-               }
+               check_added_monitors!(expected_route.last().unwrap(), 1);
 
                let mut next_msgs: Option<(msgs::UpdateFulfillHTLC, msgs::CommitmentSigned)> = None;
                macro_rules! update_fulfill_dance {
                        ($node: expr, $prev_node: expr, $last_node: expr) => {
                                {
                                        $node.node.handle_update_fulfill_htlc(&$prev_node.node.get_our_node_id(), &next_msgs.as_ref().unwrap().0).unwrap();
-                                       {
-                                               let mut added_monitors = $node.chan_monitor.added_monitors.lock().unwrap();
-                                               if $last_node {
-                                                       assert_eq!(added_monitors.len(), 0);
-                                               } else {
-                                                       assert_eq!(added_monitors.len(), 1);
-                                               }
-                                               added_monitors.clear();
-                                       }
-                                       let revoke_and_commit = $node.node.handle_commitment_signed(&$prev_node.node.get_our_node_id(), &next_msgs.as_ref().unwrap().1).unwrap();
-                                       {
-                                               let mut added_monitors = $node.chan_monitor.added_monitors.lock().unwrap();
-                                               assert_eq!(added_monitors.len(), 1);
-                                               added_monitors.clear();
-                                       }
-                                       assert!($prev_node.node.handle_revoke_and_ack(&$node.node.get_our_node_id(), &revoke_and_commit.0).unwrap().is_none());
-                                       let revoke_and_ack = $prev_node.node.handle_commitment_signed(&$node.node.get_our_node_id(), &revoke_and_commit.1.unwrap()).unwrap();
-                                       assert!(revoke_and_ack.1.is_none());
-                                       {
-                                               let mut added_monitors = $prev_node.chan_monitor.added_monitors.lock().unwrap();
-                                               assert_eq!(added_monitors.len(), 2);
-                                               added_monitors.clear();
-                                       }
-                                       assert!($node.node.handle_revoke_and_ack(&$prev_node.node.get_our_node_id(), &revoke_and_ack.0).unwrap().is_none());
-                                       {
-                                               let mut added_monitors = $node.chan_monitor.added_monitors.lock().unwrap();
-                                               assert_eq!(added_monitors.len(), 1);
-                                               added_monitors.clear();
+                                       if $last_node {
+                                               check_added_monitors!($node, 0);
+                                       } else {
+                                               check_added_monitors!($node, 1);
                                        }
+                                       commitment_signed_dance!($node, $prev_node, next_msgs.as_ref().unwrap().1, false);
                                }
                        }
                }
 
                let mut expected_next_node = expected_route.last().unwrap().node.get_our_node_id();
                let mut prev_node = expected_route.last().unwrap();
-               for node in expected_route.iter().rev() {
+               for (idx, node) in expected_route.iter().rev().enumerate() {
                        assert_eq!(expected_next_node, node.node.get_our_node_id());
                        if next_msgs.is_some() {
                                update_fulfill_dance!(node, prev_node, false);
                        }
 
                        let events = node.node.get_and_clear_pending_events();
+                       if !skip_last || idx != expected_route.len() - 1 {
+                               assert_eq!(events.len(), 1);
+                               match events[0] {
+                                       Event::UpdateHTLCs { ref node_id, updates: msgs::CommitmentUpdate { ref update_add_htlcs, ref update_fulfill_htlcs, ref update_fail_htlcs, ref update_fail_malformed_htlcs, ref update_fee, ref commitment_signed } } => {
+                                               assert!(update_add_htlcs.is_empty());
+                                               assert_eq!(update_fulfill_htlcs.len(), 1);
+                                               assert!(update_fail_htlcs.is_empty());
+                                               assert!(update_fail_malformed_htlcs.is_empty());
+                                               assert!(update_fee.is_none());
+                                               expected_next_node = node_id.clone();
+                                               next_msgs = Some((update_fulfill_htlcs[0].clone(), commitment_signed.clone()));
+                                       },
+                                       _ => panic!("Unexpected event"),
+                               }
+                       } else {
+                               assert!(events.is_empty());
+                       }
+                       if !skip_last && idx == expected_route.len() - 1 {
+                               assert_eq!(expected_next_node, origin_node.node.get_our_node_id());
+                       }
+
+                       prev_node = node;
+               }
+
+               if !skip_last {
+                       update_fulfill_dance!(origin_node, expected_route.first().unwrap(), true);
+                       let events = origin_node.node.get_and_clear_pending_events();
                        assert_eq!(events.len(), 1);
                        match events[0] {
-                               Event::UpdateHTLCs { ref node_id, updates: msgs::CommitmentUpdate { ref update_add_htlcs, ref update_fulfill_htlcs, ref update_fail_htlcs, ref update_fail_malformed_htlcs, ref commitment_signed } } => {
-                                       assert!(update_add_htlcs.is_empty());
-                                       assert_eq!(update_fulfill_htlcs.len(), 1);
-                                       assert!(update_fail_htlcs.is_empty());
-                                       assert!(update_fail_malformed_htlcs.is_empty());
-                                       expected_next_node = node_id.clone();
-                                       next_msgs = Some((update_fulfill_htlcs[0].clone(), commitment_signed.clone()));
+                               Event::PaymentSent { payment_preimage } => {
+                                       assert_eq!(payment_preimage, our_payment_preimage);
                                },
                                _ => panic!("Unexpected event"),
-                       };
-
-                       prev_node = node;
+                       }
                }
+       }
 
-               assert_eq!(expected_next_node, origin_node.node.get_our_node_id());
-               update_fulfill_dance!(origin_node, expected_route.first().unwrap(), true);
-
-               let events = origin_node.node.get_and_clear_pending_events();
-               assert_eq!(events.len(), 1);
-               match events[0] {
-                       Event::PaymentSent { payment_preimage } => {
-                               assert_eq!(payment_preimage, our_payment_preimage);
-                       },
-                       _ => panic!("Unexpected event"),
-               }
+       fn claim_payment(origin_node: &Node, expected_route: &[&Node], our_payment_preimage: [u8; 32]) {
+               claim_payment_along_route(origin_node, expected_route, false, our_payment_preimage);
        }
 
        const TEST_FINAL_CLTV: u32 = 32;
@@ -2853,18 +3353,13 @@ mod tests {
                        assert_eq!(hop.pubkey, node.node.get_our_node_id());
                }
 
-               let our_payment_preimage = unsafe { [PAYMENT_COUNT; 32] };
-               unsafe { PAYMENT_COUNT += 1 };
-               let our_payment_hash = {
-                       let mut sha = Sha256::new();
-                       sha.input(&our_payment_preimage[..]);
-                       let mut ret = [0; 32];
-                       sha.result(&mut ret);
-                       ret
-               };
+               let (_, our_payment_hash) = get_payment_preimage_hash!(origin_node);
 
                let err = origin_node.node.send_payment(route, our_payment_hash).err().unwrap();
-               assert_eq!(err.err, "Cannot send value that would put us over our max HTLC value in flight");
+               match err {
+                       APIError::ChannelUnavailable{err} => assert_eq!(err, "Cannot send value that would put us over our max HTLC value in flight"),
+                       _ => panic!("Unknown error variants"),
+               };
        }
 
        fn send_payment(origin: &Node, expected_route: &[&Node], recv_value: u64) {
@@ -2872,99 +3367,84 @@ mod tests {
                claim_payment(&origin, expected_route, our_payment_preimage);
        }
 
-       fn fail_payment(origin_node: &Node, expected_route: &[&Node], our_payment_hash: [u8; 32]) {
+       fn fail_payment_along_route(origin_node: &Node, expected_route: &[&Node], skip_last: bool, our_payment_hash: [u8; 32]) {
                assert!(expected_route.last().unwrap().node.fail_htlc_backwards(&our_payment_hash));
-               {
-                       let mut added_monitors = expected_route.last().unwrap().chan_monitor.added_monitors.lock().unwrap();
-                       assert_eq!(added_monitors.len(), 1);
-                       added_monitors.clear();
-               }
+               check_added_monitors!(expected_route.last().unwrap(), 1);
 
                let mut next_msgs: Option<(msgs::UpdateFailHTLC, msgs::CommitmentSigned)> = None;
                macro_rules! update_fail_dance {
                        ($node: expr, $prev_node: expr, $last_node: expr) => {
                                {
                                        $node.node.handle_update_fail_htlc(&$prev_node.node.get_our_node_id(), &next_msgs.as_ref().unwrap().0).unwrap();
-                                       let revoke_and_commit = $node.node.handle_commitment_signed(&$prev_node.node.get_our_node_id(), &next_msgs.as_ref().unwrap().1).unwrap();
-
-                                       {
-                                               let mut added_monitors = $node.chan_monitor.added_monitors.lock().unwrap();
-                                               assert_eq!(added_monitors.len(), 1);
-                                               added_monitors.clear();
-                                       }
-                                       assert!($prev_node.node.handle_revoke_and_ack(&$node.node.get_our_node_id(), &revoke_and_commit.0).unwrap().is_none());
-                                       {
-                                               let mut added_monitors = $prev_node.chan_monitor.added_monitors.lock().unwrap();
-                                               assert_eq!(added_monitors.len(), 1);
-                                               added_monitors.clear();
-                                       }
-                                       let revoke_and_ack = $prev_node.node.handle_commitment_signed(&$node.node.get_our_node_id(), &revoke_and_commit.1.unwrap()).unwrap();
-                                       {
-                                               let mut added_monitors = $prev_node.chan_monitor.added_monitors.lock().unwrap();
-                                               assert_eq!(added_monitors.len(), 1);
-                                               added_monitors.clear();
-                                       }
-                                       assert!(revoke_and_ack.1.is_none());
-                                       assert!($node.node.get_and_clear_pending_events().is_empty());
-                                       assert!($node.node.handle_revoke_and_ack(&$prev_node.node.get_our_node_id(), &revoke_and_ack.0).unwrap().is_none());
-                                       {
-                                               let mut added_monitors = $node.chan_monitor.added_monitors.lock().unwrap();
-                                               if $last_node {
-                                                       assert_eq!(added_monitors.len(), 1);
-                                               } else {
-                                                       assert_eq!(added_monitors.len(), 2);
-                                                       assert!(added_monitors[0].0 != added_monitors[1].0);
-                                               }
-                                               added_monitors.clear();
-                                       }
-                               }
-                       }
-               }
+                                       commitment_signed_dance!($node, $prev_node, next_msgs.as_ref().unwrap().1, !$last_node);
+                               }
+                       }
+               }
 
                let mut expected_next_node = expected_route.last().unwrap().node.get_our_node_id();
                let mut prev_node = expected_route.last().unwrap();
-               for node in expected_route.iter().rev() {
+               for (idx, node) in expected_route.iter().rev().enumerate() {
                        assert_eq!(expected_next_node, node.node.get_our_node_id());
                        if next_msgs.is_some() {
-                               update_fail_dance!(node, prev_node, false);
+                               // We may be the "last node" for the purpose of the commitment dance if we're
+                               // skipping the last node (implying it is disconnected) and we're the
+                               // second-to-last node!
+                               update_fail_dance!(node, prev_node, skip_last && idx == expected_route.len() - 1);
                        }
 
                        let events = node.node.get_and_clear_pending_events();
-                       assert_eq!(events.len(), 1);
-                       match events[0] {
-                               Event::UpdateHTLCs { ref node_id, updates: msgs::CommitmentUpdate { ref update_add_htlcs, ref update_fulfill_htlcs, ref update_fail_htlcs, ref update_fail_malformed_htlcs, ref commitment_signed } } => {
-                                       assert!(update_add_htlcs.is_empty());
-                                       assert!(update_fulfill_htlcs.is_empty());
-                                       assert_eq!(update_fail_htlcs.len(), 1);
-                                       assert!(update_fail_malformed_htlcs.is_empty());
-                                       expected_next_node = node_id.clone();
-                                       next_msgs = Some((update_fail_htlcs[0].clone(), commitment_signed.clone()));
-                               },
-                               _ => panic!("Unexpected event"),
-                       };
+                       if !skip_last || idx != expected_route.len() - 1 {
+                               assert_eq!(events.len(), 1);
+                               match events[0] {
+                                       Event::UpdateHTLCs { ref node_id, updates: msgs::CommitmentUpdate { ref update_add_htlcs, ref update_fulfill_htlcs, ref update_fail_htlcs, ref update_fail_malformed_htlcs, ref update_fee, ref commitment_signed } } => {
+                                               assert!(update_add_htlcs.is_empty());
+                                               assert!(update_fulfill_htlcs.is_empty());
+                                               assert_eq!(update_fail_htlcs.len(), 1);
+                                               assert!(update_fail_malformed_htlcs.is_empty());
+                                               assert!(update_fee.is_none());
+                                               expected_next_node = node_id.clone();
+                                               next_msgs = Some((update_fail_htlcs[0].clone(), commitment_signed.clone()));
+                                       },
+                                       _ => panic!("Unexpected event"),
+                               }
+                       } else {
+                               assert!(events.is_empty());
+                       }
+                       if !skip_last && idx == expected_route.len() - 1 {
+                               assert_eq!(expected_next_node, origin_node.node.get_our_node_id());
+                       }
 
                        prev_node = node;
                }
 
-               assert_eq!(expected_next_node, origin_node.node.get_our_node_id());
-               update_fail_dance!(origin_node, expected_route.first().unwrap(), true);
+               if !skip_last {
+                       update_fail_dance!(origin_node, expected_route.first().unwrap(), true);
 
-               let events = origin_node.node.get_and_clear_pending_events();
-               assert_eq!(events.len(), 1);
-               match events[0] {
-                       Event::PaymentFailed { payment_hash } => {
-                               assert_eq!(payment_hash, our_payment_hash);
-                       },
-                       _ => panic!("Unexpected event"),
+                       let events = origin_node.node.get_and_clear_pending_events();
+                       assert_eq!(events.len(), 1);
+                       match events[0] {
+                               Event::PaymentFailed { payment_hash, rejected_by_dest } => {
+                                       assert_eq!(payment_hash, our_payment_hash);
+                                       assert!(rejected_by_dest);
+                               },
+                               _ => panic!("Unexpected event"),
+                       }
                }
        }
 
+       fn fail_payment(origin_node: &Node, expected_route: &[&Node], our_payment_hash: [u8; 32]) {
+               fail_payment_along_route(origin_node, expected_route, false, our_payment_hash);
+       }
+
        fn create_network(node_count: usize) -> Vec<Node> {
                let mut nodes = Vec::new();
                let mut rng = thread_rng();
                let secp_ctx = Secp256k1::new();
                let logger: Arc<Logger> = Arc::new(test_utils::TestLogger::new());
 
+               let chan_count = Rc::new(RefCell::new(0));
+               let payment_count = Rc::new(RefCell::new(0));
+
                for _ in 0..node_count {
                        let feeest = Arc::new(test_utils::TestFeeEstimator { sat_per_kw: 253 });
                        let chain_monitor = Arc::new(chaininterface::ChainWatchInterfaceUtil::new(Network::Testnet, Arc::clone(&logger)));
@@ -2977,12 +3457,537 @@ mod tests {
                        };
                        let node = ChannelManager::new(node_id.clone(), 0, true, Network::Testnet, feeest.clone(), chan_monitor.clone(), chain_monitor.clone(), tx_broadcaster.clone(), Arc::clone(&logger)).unwrap();
                        let router = Router::new(PublicKey::from_secret_key(&secp_ctx, &node_id), chain_monitor.clone(), Arc::clone(&logger));
-                       nodes.push(Node { chain_monitor, tx_broadcaster, chan_monitor, node, router });
+                       nodes.push(Node { chain_monitor, tx_broadcaster, chan_monitor, node, router,
+                               network_payment_count: payment_count.clone(),
+                               network_chan_count: chan_count.clone(),
+                       });
                }
 
                nodes
        }
 
+       #[test]
+       fn test_async_inbound_update_fee() {
+               let mut nodes = create_network(2);
+               let chan = create_announced_chan_between_nodes(&nodes, 0, 1);
+               let channel_id = chan.2;
+
+               macro_rules! get_feerate {
+                       ($node: expr) => {{
+                               let chan_lock = $node.node.channel_state.lock().unwrap();
+                               let chan = chan_lock.by_id.get(&channel_id).unwrap();
+                               chan.get_feerate()
+                       }}
+               }
+
+               // balancing
+               send_payment(&nodes[0], &vec!(&nodes[1])[..], 8000000);
+
+               // A                                        B
+               // update_fee                            ->
+               // send (1) commitment_signed            -.
+               //                                       <- update_add_htlc/commitment_signed
+               // send (2) RAA (awaiting remote revoke) -.
+               // (1) commitment_signed is delivered    ->
+               //                                       .- send (3) RAA (awaiting remote revoke)
+               // (2) RAA is delivered                  ->
+               //                                       .- send (4) commitment_signed
+               //                                       <- (3) RAA is delivered
+               // send (5) commitment_signed            -.
+               //                                       <- (4) commitment_signed is delivered
+               // send (6) RAA                          -.
+               // (5) commitment_signed is delivered    ->
+               //                                       <- RAA
+               // (6) RAA is delivered                  ->
+
+               // First nodes[0] generates an update_fee
+               nodes[0].node.update_fee(channel_id, get_feerate!(nodes[0]) + 20).unwrap();
+               check_added_monitors!(nodes[0], 1);
+
+               let events_0 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_0.len(), 1);
+               let (update_msg, commitment_signed) = match events_0[0] { // (1)
+                       Event::UpdateHTLCs { updates: msgs::CommitmentUpdate { ref update_fee, ref commitment_signed, .. }, .. } => {
+                               (update_fee.as_ref(), commitment_signed)
+                       },
+                       _ => panic!("Unexpected event"),
+               };
+
+               nodes[1].node.handle_update_fee(&nodes[0].node.get_our_node_id(), update_msg.unwrap()).unwrap();
+
+               // ...but before it's delivered, nodes[1] starts to send a payment back to nodes[0]...
+               let (_, our_payment_hash) = get_payment_preimage_hash!(nodes[0]);
+               nodes[1].node.send_payment(nodes[1].router.get_route(&nodes[0].node.get_our_node_id(), None, &Vec::new(), 40000, TEST_FINAL_CLTV).unwrap(), our_payment_hash).unwrap();
+               check_added_monitors!(nodes[1], 1);
+
+               let payment_event = {
+                       let mut events_1 = nodes[1].node.get_and_clear_pending_events();
+                       assert_eq!(events_1.len(), 1);
+                       SendEvent::from_event(events_1.remove(0))
+               };
+               assert_eq!(payment_event.node_id, nodes[0].node.get_our_node_id());
+               assert_eq!(payment_event.msgs.len(), 1);
+
+               // ...now when the messages get delivered everyone should be happy
+               nodes[0].node.handle_update_add_htlc(&nodes[1].node.get_our_node_id(), &payment_event.msgs[0]).unwrap();
+               let (as_revoke_msg, as_commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &payment_event.commitment_msg).unwrap(); // (2)
+               assert!(as_commitment_signed.is_none()); // nodes[0] is awaiting nodes[1] revoke_and_ack
+               check_added_monitors!(nodes[0], 1);
+
+               // deliver(1), generate (3):
+               let (bs_revoke_msg, bs_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), commitment_signed).unwrap();
+               assert!(bs_commitment_signed.is_none()); // nodes[1] is awaiting nodes[0] revoke_and_ack
+               check_added_monitors!(nodes[1], 1);
+
+               let bs_update = nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &as_revoke_msg).unwrap(); // deliver (2)
+               assert!(bs_update.as_ref().unwrap().update_add_htlcs.is_empty()); // (4)
+               assert!(bs_update.as_ref().unwrap().update_fulfill_htlcs.is_empty()); // (4)
+               assert!(bs_update.as_ref().unwrap().update_fail_htlcs.is_empty()); // (4)
+               assert!(bs_update.as_ref().unwrap().update_fail_malformed_htlcs.is_empty()); // (4)
+               assert!(bs_update.as_ref().unwrap().update_fee.is_none()); // (4)
+               check_added_monitors!(nodes[1], 1);
+
+               let as_update = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_revoke_msg).unwrap(); // deliver (3)
+               assert!(as_update.as_ref().unwrap().update_add_htlcs.is_empty()); // (5)
+               assert!(as_update.as_ref().unwrap().update_fulfill_htlcs.is_empty()); // (5)
+               assert!(as_update.as_ref().unwrap().update_fail_htlcs.is_empty()); // (5)
+               assert!(as_update.as_ref().unwrap().update_fail_malformed_htlcs.is_empty()); // (5)
+               assert!(as_update.as_ref().unwrap().update_fee.is_none()); // (5)
+               check_added_monitors!(nodes[0], 1);
+
+               let (as_second_revoke, as_second_commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &bs_update.unwrap().commitment_signed).unwrap(); // deliver (4)
+               assert!(as_second_commitment_signed.is_none()); // only (6)
+               check_added_monitors!(nodes[0], 1);
+
+               let (bs_second_revoke, bs_second_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &as_update.unwrap().commitment_signed).unwrap(); // deliver (5)
+               assert!(bs_second_commitment_signed.is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               assert!(nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_second_revoke).unwrap().is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               let events_2 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_2.len(), 1);
+               match events_2[0] {
+                       Event::PendingHTLCsForwardable {..} => {}, // If we actually processed we'd receive the payment
+                       _ => panic!("Unexpected event"),
+               }
+
+               assert!(nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &as_second_revoke).unwrap().is_none()); // deliver (6)
+               check_added_monitors!(nodes[1], 1);
+       }
+
+       #[test]
+       fn test_update_fee_unordered_raa() {
+               // Just the intro to the previous test followed by an out-of-order RAA (which caused a
+               // crash in an earlier version of the update_fee patch)
+               let mut nodes = create_network(2);
+               let chan = create_announced_chan_between_nodes(&nodes, 0, 1);
+               let channel_id = chan.2;
+
+               macro_rules! get_feerate {
+                       ($node: expr) => {{
+                               let chan_lock = $node.node.channel_state.lock().unwrap();
+                               let chan = chan_lock.by_id.get(&channel_id).unwrap();
+                               chan.get_feerate()
+                       }}
+               }
+
+               // balancing
+               send_payment(&nodes[0], &vec!(&nodes[1])[..], 8000000);
+
+               // First nodes[0] generates an update_fee
+               nodes[0].node.update_fee(channel_id, get_feerate!(nodes[0]) + 20).unwrap();
+               check_added_monitors!(nodes[0], 1);
+
+               let events_0 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_0.len(), 1);
+               let update_msg = match events_0[0] { // (1)
+                       Event::UpdateHTLCs { updates: msgs::CommitmentUpdate { ref update_fee, .. }, .. } => {
+                               update_fee.as_ref()
+                       },
+                       _ => panic!("Unexpected event"),
+               };
+
+               nodes[1].node.handle_update_fee(&nodes[0].node.get_our_node_id(), update_msg.unwrap()).unwrap();
+
+               // ...but before it's delivered, nodes[1] starts to send a payment back to nodes[0]...
+               let (_, our_payment_hash) = get_payment_preimage_hash!(nodes[0]);
+               nodes[1].node.send_payment(nodes[1].router.get_route(&nodes[0].node.get_our_node_id(), None, &Vec::new(), 40000, TEST_FINAL_CLTV).unwrap(), our_payment_hash).unwrap();
+               check_added_monitors!(nodes[1], 1);
+
+               let payment_event = {
+                       let mut events_1 = nodes[1].node.get_and_clear_pending_events();
+                       assert_eq!(events_1.len(), 1);
+                       SendEvent::from_event(events_1.remove(0))
+               };
+               assert_eq!(payment_event.node_id, nodes[0].node.get_our_node_id());
+               assert_eq!(payment_event.msgs.len(), 1);
+
+               // ...now when the messages get delivered everyone should be happy
+               nodes[0].node.handle_update_add_htlc(&nodes[1].node.get_our_node_id(), &payment_event.msgs[0]).unwrap();
+               let (as_revoke_msg, as_commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &payment_event.commitment_msg).unwrap(); // (2)
+               assert!(as_commitment_signed.is_none()); // nodes[0] is awaiting nodes[1] revoke_and_ack
+               check_added_monitors!(nodes[0], 1);
+
+               assert!(nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &as_revoke_msg).unwrap().is_none()); // deliver (2)
+               check_added_monitors!(nodes[1], 1);
+
+               // We can't continue, sadly, because our (1) now has a bogus signature
+       }
+
+       #[test]
+       fn test_multi_flight_update_fee() {
+               let nodes = create_network(2);
+               let chan = create_announced_chan_between_nodes(&nodes, 0, 1);
+               let channel_id = chan.2;
+
+               macro_rules! get_feerate {
+                       ($node: expr) => {{
+                               let chan_lock = $node.node.channel_state.lock().unwrap();
+                               let chan = chan_lock.by_id.get(&channel_id).unwrap();
+                               chan.get_feerate()
+                       }}
+               }
+
+               // A                                        B
+               // update_fee/commitment_signed          ->
+               //                                       .- send (1) RAA and (2) commitment_signed
+               // update_fee (never committed)          ->
+               // (3) update_fee                        ->
+               // We have to manually generate the above update_fee, it is allowed by the protocol but we
+               // don't track which updates correspond to which revoke_and_ack responses so we're in
+               // AwaitingRAA mode and will not generate the update_fee yet.
+               //                                       <- (1) RAA delivered
+               // (3) is generated and send (4) CS      -.
+               // Note that A cannot generate (4) prior to (1) being delivered as it otherwise doesn't
+               // know the per_commitment_point to use for it.
+               //                                       <- (2) commitment_signed delivered
+               // revoke_and_ack                        ->
+               //                                          B should send no response here
+               // (4) commitment_signed delivered       ->
+               //                                       <- RAA/commitment_signed delivered
+               // revoke_and_ack                        ->
+
+               // First nodes[0] generates an update_fee
+               let initial_feerate = get_feerate!(nodes[0]);
+               nodes[0].node.update_fee(channel_id, initial_feerate + 20).unwrap();
+               check_added_monitors!(nodes[0], 1);
+
+               let events_0 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_0.len(), 1);
+               let (update_msg_1, commitment_signed_1) = match events_0[0] { // (1)
+                       Event::UpdateHTLCs { updates: msgs::CommitmentUpdate { ref update_fee, ref commitment_signed, .. }, .. } => {
+                               (update_fee.as_ref().unwrap(), commitment_signed)
+                       },
+                       _ => panic!("Unexpected event"),
+               };
+
+               // Deliver first update_fee/commitment_signed pair, generating (1) and (2):
+               nodes[1].node.handle_update_fee(&nodes[0].node.get_our_node_id(), update_msg_1).unwrap();
+               let (bs_revoke_msg, bs_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), commitment_signed_1).unwrap();
+               check_added_monitors!(nodes[1], 1);
+
+               // nodes[0] is awaiting a revoke from nodes[1] before it will create a new commitment
+               // transaction:
+               nodes[0].node.update_fee(channel_id, initial_feerate + 40).unwrap();
+               assert!(nodes[0].node.get_and_clear_pending_events().is_empty());
+
+               // Create the (3) update_fee message that nodes[0] will generate before it does...
+               let mut update_msg_2 = msgs::UpdateFee {
+                       channel_id: update_msg_1.channel_id.clone(),
+                       feerate_per_kw: (initial_feerate + 30) as u32,
+               };
+
+               nodes[1].node.handle_update_fee(&nodes[0].node.get_our_node_id(), &update_msg_2).unwrap();
+
+               update_msg_2.feerate_per_kw = (initial_feerate + 40) as u32;
+               // Deliver (3)
+               nodes[1].node.handle_update_fee(&nodes[0].node.get_our_node_id(), &update_msg_2).unwrap();
+
+               // Deliver (1), generating (3) and (4)
+               let as_second_update = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_revoke_msg).unwrap();
+               check_added_monitors!(nodes[0], 1);
+               assert!(as_second_update.as_ref().unwrap().update_add_htlcs.is_empty());
+               assert!(as_second_update.as_ref().unwrap().update_fulfill_htlcs.is_empty());
+               assert!(as_second_update.as_ref().unwrap().update_fail_htlcs.is_empty());
+               assert!(as_second_update.as_ref().unwrap().update_fail_malformed_htlcs.is_empty());
+               // Check that the update_fee newly generated matches what we delivered:
+               assert_eq!(as_second_update.as_ref().unwrap().update_fee.as_ref().unwrap().channel_id, update_msg_2.channel_id);
+               assert_eq!(as_second_update.as_ref().unwrap().update_fee.as_ref().unwrap().feerate_per_kw, update_msg_2.feerate_per_kw);
+
+               // Deliver (2) commitment_signed
+               let (as_revoke_msg, as_commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), bs_commitment_signed.as_ref().unwrap()).unwrap();
+               check_added_monitors!(nodes[0], 1);
+               assert!(as_commitment_signed.is_none());
+
+               assert!(nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &as_revoke_msg).unwrap().is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               // Delever (4)
+               let (bs_second_revoke, bs_second_commitment) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &as_second_update.unwrap().commitment_signed).unwrap();
+               check_added_monitors!(nodes[1], 1);
+
+               assert!(nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_second_revoke).unwrap().is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               let (as_second_revoke, as_second_commitment) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &bs_second_commitment.unwrap()).unwrap();
+               assert!(as_second_commitment.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               assert!(nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &as_second_revoke).unwrap().is_none());
+               check_added_monitors!(nodes[1], 1);
+       }
+
+       #[test]
+       fn test_update_fee_vanilla() {
+               let nodes = create_network(2);
+               let chan = create_announced_chan_between_nodes(&nodes, 0, 1);
+               let channel_id = chan.2;
+
+               macro_rules! get_feerate {
+                       ($node: expr) => {{
+                               let chan_lock = $node.node.channel_state.lock().unwrap();
+                               let chan = chan_lock.by_id.get(&channel_id).unwrap();
+                               chan.get_feerate()
+                       }}
+               }
+
+               let feerate = get_feerate!(nodes[0]);
+               nodes[0].node.update_fee(channel_id, feerate+20).unwrap();
+
+               let events_0 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_0.len(), 1);
+               let (update_msg, commitment_signed) = match events_0[0] {
+                               Event::UpdateHTLCs { node_id:_, updates: msgs::CommitmentUpdate { update_add_htlcs:_, update_fulfill_htlcs:_, update_fail_htlcs:_, update_fail_malformed_htlcs:_, ref update_fee, ref commitment_signed } } => {
+                               (update_fee.as_ref(), commitment_signed)
+                       },
+                       _ => panic!("Unexpected event"),
+               };
+               nodes[1].node.handle_update_fee(&nodes[0].node.get_our_node_id(), update_msg.unwrap()).unwrap();
+
+               let (revoke_msg, commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), commitment_signed).unwrap();
+               let commitment_signed = commitment_signed.unwrap();
+               check_added_monitors!(nodes[0], 1);
+               check_added_monitors!(nodes[1], 1);
+
+               let resp_option = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &revoke_msg).unwrap();
+               assert!(resp_option.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               let (revoke_msg, commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &commitment_signed).unwrap();
+               assert!(commitment_signed.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               let resp_option = nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &revoke_msg).unwrap();
+               assert!(resp_option.is_none());
+               check_added_monitors!(nodes[1], 1);
+       }
+
+       #[test]
+       fn test_update_fee_with_fundee_update_add_htlc() {
+               let mut nodes = create_network(2);
+               let chan = create_announced_chan_between_nodes(&nodes, 0, 1);
+               let channel_id = chan.2;
+
+               macro_rules! get_feerate {
+                       ($node: expr) => {{
+                               let chan_lock = $node.node.channel_state.lock().unwrap();
+                               let chan = chan_lock.by_id.get(&channel_id).unwrap();
+                               chan.get_feerate()
+                       }}
+               }
+
+               // balancing
+               send_payment(&nodes[0], &vec!(&nodes[1])[..], 8000000);
+
+               let feerate = get_feerate!(nodes[0]);
+               nodes[0].node.update_fee(channel_id, feerate+20).unwrap();
+
+               let events_0 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_0.len(), 1);
+               let (update_msg, commitment_signed) = match events_0[0] {
+                               Event::UpdateHTLCs { node_id:_, updates: msgs::CommitmentUpdate { update_add_htlcs:_, update_fulfill_htlcs:_, update_fail_htlcs:_, update_fail_malformed_htlcs:_, ref update_fee, ref commitment_signed } } => {
+                               (update_fee.as_ref(), commitment_signed)
+                       },
+                       _ => panic!("Unexpected event"),
+               };
+               nodes[1].node.handle_update_fee(&nodes[0].node.get_our_node_id(), update_msg.unwrap()).unwrap();
+               check_added_monitors!(nodes[0], 1);
+               let (revoke_msg, commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), commitment_signed).unwrap();
+               let commitment_signed = commitment_signed.unwrap();
+               check_added_monitors!(nodes[1], 1);
+
+               let route = nodes[1].router.get_route(&nodes[0].node.get_our_node_id(), None, &Vec::new(), 800000, TEST_FINAL_CLTV).unwrap();
+
+               let (our_payment_preimage, our_payment_hash) = get_payment_preimage_hash!(nodes[1]);
+
+               // nothing happens since node[1] is in AwaitingRemoteRevoke
+               nodes[1].node.send_payment(route, our_payment_hash).unwrap();
+               {
+                       let mut added_monitors = nodes[0].chan_monitor.added_monitors.lock().unwrap();
+                       assert_eq!(added_monitors.len(), 0);
+                       added_monitors.clear();
+               }
+               let events = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events.len(), 0);
+               // node[1] has nothing to do
+
+               let resp_option = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &revoke_msg).unwrap();
+               assert!(resp_option.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               let (revoke_msg, commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &commitment_signed).unwrap();
+               assert!(commitment_signed.is_none());
+               check_added_monitors!(nodes[0], 1);
+               let resp_option = nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &revoke_msg).unwrap();
+               // AwaitingRemoteRevoke ends here
+
+               let commitment_update = resp_option.unwrap();
+               assert_eq!(commitment_update.update_add_htlcs.len(), 1);
+               assert_eq!(commitment_update.update_fulfill_htlcs.len(), 0);
+               assert_eq!(commitment_update.update_fail_htlcs.len(), 0);
+               assert_eq!(commitment_update.update_fail_malformed_htlcs.len(), 0);
+               assert_eq!(commitment_update.update_fee.is_none(), true);
+
+               nodes[0].node.handle_update_add_htlc(&nodes[1].node.get_our_node_id(), &commitment_update.update_add_htlcs[0]).unwrap();
+               let (revoke, commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &commitment_update.commitment_signed).unwrap();
+               check_added_monitors!(nodes[0], 1);
+               check_added_monitors!(nodes[1], 1);
+               let commitment_signed = commitment_signed.unwrap();
+               let resp_option = nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &revoke).unwrap();
+               check_added_monitors!(nodes[1], 1);
+               assert!(resp_option.is_none());
+
+               let (revoke, commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &commitment_signed).unwrap();
+               check_added_monitors!(nodes[1], 1);
+               assert!(commitment_signed.is_none());
+               let resp_option = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &revoke).unwrap();
+               check_added_monitors!(nodes[0], 1);
+               assert!(resp_option.is_none());
+
+               let events = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events.len(), 1);
+               match events[0] {
+                       Event::PendingHTLCsForwardable { .. } => { },
+                       _ => panic!("Unexpected event"),
+               };
+               nodes[0].node.channel_state.lock().unwrap().next_forward = Instant::now();
+               nodes[0].node.process_pending_htlc_forwards();
+
+               let events = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events.len(), 1);
+               match events[0] {
+                       Event::PaymentReceived { .. } => { },
+                       _ => panic!("Unexpected event"),
+               };
+
+               claim_payment(&nodes[1], &vec!(&nodes[0])[..], our_payment_preimage);
+
+               send_payment(&nodes[1], &vec!(&nodes[0])[..], 800000);
+               send_payment(&nodes[0], &vec!(&nodes[1])[..], 800000);
+               close_channel(&nodes[0], &nodes[1], &chan.2, chan.3, true);
+       }
+
+       #[test]
+       fn test_update_fee() {
+               let nodes = create_network(2);
+               let chan = create_announced_chan_between_nodes(&nodes, 0, 1);
+               let channel_id = chan.2;
+
+               macro_rules! get_feerate {
+                       ($node: expr) => {{
+                               let chan_lock = $node.node.channel_state.lock().unwrap();
+                               let chan = chan_lock.by_id.get(&channel_id).unwrap();
+                               chan.get_feerate()
+                       }}
+               }
+
+               // A                                        B
+               // (1) update_fee/commitment_signed      ->
+               //                                       <- (2) revoke_and_ack
+               //                                       .- send (3) commitment_signed
+               // (4) update_fee/commitment_signed      ->
+               //                                       .- send (5) revoke_and_ack (no CS as we're awaiting a revoke)
+               //                                       <- (3) commitment_signed delivered
+               // send (6) revoke_and_ack               -.
+               //                                       <- (5) deliver revoke_and_ack
+               // (6) deliver revoke_and_ack            ->
+               //                                       .- send (7) commitment_signed in response to (4)
+               //                                       <- (7) deliver commitment_signed
+               // revoke_and_ack                        ->
+
+               // Create and deliver (1)...
+               let feerate = get_feerate!(nodes[0]);
+               nodes[0].node.update_fee(channel_id, feerate+20).unwrap();
+
+               let events_0 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_0.len(), 1);
+               let (update_msg, commitment_signed) = match events_0[0] {
+                               Event::UpdateHTLCs { node_id:_, updates: msgs::CommitmentUpdate { update_add_htlcs:_, update_fulfill_htlcs:_, update_fail_htlcs:_, update_fail_malformed_htlcs:_, ref update_fee, ref commitment_signed } } => {
+                               (update_fee.as_ref(), commitment_signed)
+                       },
+                       _ => panic!("Unexpected event"),
+               };
+               nodes[1].node.handle_update_fee(&nodes[0].node.get_our_node_id(), update_msg.unwrap()).unwrap();
+
+               // Generate (2) and (3):
+               let (revoke_msg, commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), commitment_signed).unwrap();
+               let commitment_signed_0 = commitment_signed.unwrap();
+               check_added_monitors!(nodes[0], 1);
+               check_added_monitors!(nodes[1], 1);
+
+               // Deliver (2):
+               let resp_option = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &revoke_msg).unwrap();
+               assert!(resp_option.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               // Create and deliver (4)...
+               nodes[0].node.update_fee(channel_id, feerate+30).unwrap();
+               let events_0 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_0.len(), 1);
+               let (update_msg, commitment_signed) = match events_0[0] {
+                               Event::UpdateHTLCs { node_id:_, updates: msgs::CommitmentUpdate { update_add_htlcs:_, update_fulfill_htlcs:_, update_fail_htlcs:_, update_fail_malformed_htlcs:_, ref update_fee, ref commitment_signed } } => {
+                               (update_fee.as_ref(), commitment_signed)
+                       },
+                       _ => panic!("Unexpected event"),
+               };
+               nodes[1].node.handle_update_fee(&nodes[0].node.get_our_node_id(), update_msg.unwrap()).unwrap();
+
+               let (revoke_msg, commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), commitment_signed).unwrap();
+               // ... creating (5)
+               assert!(commitment_signed.is_none());
+               check_added_monitors!(nodes[0], 1);
+               check_added_monitors!(nodes[1], 1);
+
+               // Handle (3), creating (6):
+               let (revoke_msg_0, commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &commitment_signed_0).unwrap();
+               assert!(commitment_signed.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               // Deliver (5):
+               let resp_option = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &revoke_msg).unwrap();
+               assert!(resp_option.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               // Deliver (6), creating (7):
+               let resp_option = nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &revoke_msg_0).unwrap();
+               let commitment_signed = resp_option.unwrap().commitment_signed;
+               check_added_monitors!(nodes[1], 1);
+
+               // Deliver (7)
+               let (revoke_msg, commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &commitment_signed).unwrap();
+               assert!(commitment_signed.is_none());
+               check_added_monitors!(nodes[0], 1);
+               let resp_option = nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &revoke_msg).unwrap();
+               assert!(resp_option.is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               assert_eq!(get_feerate!(nodes[0]), feerate + 30);
+               assert_eq!(get_feerate!(nodes[1]), feerate + 30);
+               close_channel(&nodes[0], &nodes[1], &chan.2, chan.3, true);
+       }
+
        #[test]
        fn fake_network_test() {
                // Simple test which builds a network of ChannelManagers, connects them to each other, and
@@ -3093,57 +4098,101 @@ mod tests {
                close_channel(&nodes[2], &nodes[3], &chan_3.2, chan_3.3, true);
                close_channel(&nodes[1], &nodes[3], &chan_4.2, chan_4.3, false);
                close_channel(&nodes[1], &nodes[3], &chan_5.2, chan_5.3, false);
+       }
 
-               // Check that we processed all pending events
-               for node in nodes {
-                       assert_eq!(node.node.get_and_clear_pending_events().len(), 0);
-                       assert_eq!(node.chan_monitor.added_monitors.lock().unwrap().len(), 0);
-               }
+       #[test]
+       fn duplicate_htlc_test() {
+               // Test that we accept duplicate payment_hash HTLCs across the network and that
+               // claiming/failing them are all separate and don't effect each other
+               let mut nodes = create_network(6);
+
+               // Create some initial channels to route via 3 to 4/5 from 0/1/2
+               create_announced_chan_between_nodes(&nodes, 0, 3);
+               create_announced_chan_between_nodes(&nodes, 1, 3);
+               create_announced_chan_between_nodes(&nodes, 2, 3);
+               create_announced_chan_between_nodes(&nodes, 3, 4);
+               create_announced_chan_between_nodes(&nodes, 3, 5);
+
+               let (payment_preimage, payment_hash) = route_payment(&nodes[0], &vec!(&nodes[3], &nodes[4])[..], 1000000);
+
+               *nodes[0].network_payment_count.borrow_mut() -= 1;
+               assert_eq!(route_payment(&nodes[1], &vec!(&nodes[3])[..], 1000000).0, payment_preimage);
+
+               *nodes[0].network_payment_count.borrow_mut() -= 1;
+               assert_eq!(route_payment(&nodes[2], &vec!(&nodes[3], &nodes[5])[..], 1000000).0, payment_preimage);
+
+               claim_payment(&nodes[0], &vec!(&nodes[3], &nodes[4])[..], payment_preimage);
+               fail_payment(&nodes[2], &vec!(&nodes[3], &nodes[5])[..], payment_hash);
+               claim_payment(&nodes[1], &vec!(&nodes[3])[..], payment_preimage);
        }
 
        #[derive(PartialEq)]
        enum HTLCType { NONE, TIMEOUT, SUCCESS }
+       /// Tests that the given node has broadcast transactions for the given Channel
+       ///
+       /// First checks that the latest local commitment tx has been broadcast, unless an explicit
+       /// commitment_tx is provided, which may be used to test that a remote commitment tx was
+       /// broadcast and the revoked outputs were claimed.
+       ///
+       /// Next tests that there is (or is not) a transaction that spends the commitment transaction
+       /// that appears to be the type of HTLC transaction specified in has_htlc_tx.
+       ///
+       /// All broadcast transactions must be accounted for in one of the above three types of we'll
+       /// also fail.
        fn test_txn_broadcast(node: &Node, chan: &(msgs::ChannelUpdate, msgs::ChannelUpdate, [u8; 32], Transaction), commitment_tx: Option<Transaction>, has_htlc_tx: HTLCType) -> Vec<Transaction> {
                let mut node_txn = node.tx_broadcaster.txn_broadcasted.lock().unwrap();
                assert!(node_txn.len() >= if commitment_tx.is_some() { 0 } else { 1 } + if has_htlc_tx == HTLCType::NONE { 0 } else { 1 });
 
                let mut res = Vec::with_capacity(2);
-
-               if let Some(explicit_tx) = commitment_tx {
-                       res.push(explicit_tx.clone());
-               } else {
-                       for tx in node_txn.iter() {
-                               if tx.input.len() == 1 && tx.input[0].previous_output.txid == chan.3.txid() {
-                                       let mut funding_tx_map = HashMap::new();
-                                       funding_tx_map.insert(chan.3.txid(), chan.3.clone());
-                                       tx.verify(&funding_tx_map).unwrap();
+               node_txn.retain(|tx| {
+                       if tx.input.len() == 1 && tx.input[0].previous_output.txid == chan.3.txid() {
+                               check_spends!(tx, chan.3.clone());
+                               if commitment_tx.is_none() {
                                        res.push(tx.clone());
                                }
-                       }
+                               false
+                       } else { true }
+               });
+               if let Some(explicit_tx) = commitment_tx {
+                       res.push(explicit_tx.clone());
                }
+
                assert_eq!(res.len(), 1);
 
                if has_htlc_tx != HTLCType::NONE {
-                       for tx in node_txn.iter() {
+                       node_txn.retain(|tx| {
                                if tx.input.len() == 1 && tx.input[0].previous_output.txid == res[0].txid() {
-                                       let mut funding_tx_map = HashMap::new();
-                                       funding_tx_map.insert(res[0].txid(), res[0].clone());
-                                       tx.verify(&funding_tx_map).unwrap();
+                                       check_spends!(tx, res[0].clone());
                                        if has_htlc_tx == HTLCType::TIMEOUT {
                                                assert!(tx.lock_time != 0);
                                        } else {
                                                assert!(tx.lock_time == 0);
                                        }
                                        res.push(tx.clone());
-                                       break;
-                               }
-                       }
+                                       false
+                               } else { true }
+                       });
                        assert_eq!(res.len(), 2);
                }
-               node_txn.clear();
+
+               assert!(node_txn.is_empty());
                res
        }
 
+       /// Tests that the given node has broadcast a claim transaction against the provided revoked
+       /// HTLC transaction.
+       fn test_revoked_htlc_claim_txn_broadcast(node: &Node, revoked_tx: Transaction) {
+               let mut node_txn = node.tx_broadcaster.txn_broadcasted.lock().unwrap();
+               assert_eq!(node_txn.len(), 1);
+               node_txn.retain(|tx| {
+                       if tx.input.len() == 1 && tx.input[0].previous_output.txid == revoked_tx.txid() {
+                               check_spends!(tx, revoked_tx.clone());
+                               false
+                       } else { true }
+               });
+               assert!(node_txn.is_empty());
+       }
+
        fn check_preimage_claim(node: &Node, prev_txn: &Vec<Transaction>) -> Vec<Transaction> {
                let mut node_txn = node.tx_broadcaster.txn_broadcasted.lock().unwrap();
 
@@ -3153,10 +4202,7 @@ mod tests {
 
                for tx in prev_txn {
                        if node_txn[0].input[0].previous_output.txid == tx.txid() {
-                               let mut funding_tx_map = HashMap::new();
-                               funding_tx_map.insert(tx.txid(), tx.clone());
-                               node_txn[0].verify(&funding_tx_map).unwrap();
-
+                               check_spends!(node_txn[0], tx.clone());
                                assert!(node_txn[0].input[0].witness[2].len() > 106); // must spend an htlc output
                                assert_eq!(tx.input.len(), 1); // must spend a commitment tx
 
@@ -3196,6 +4242,281 @@ mod tests {
                }
        }
 
+       macro_rules! expect_pending_htlcs_forwardable {
+               ($node: expr) => {{
+                       let events = $node.node.get_and_clear_pending_events();
+                       assert_eq!(events.len(), 1);
+                       match events[0] {
+                               Event::PendingHTLCsForwardable { .. } => { },
+                               _ => panic!("Unexpected event"),
+                       };
+                       $node.node.channel_state.lock().unwrap().next_forward = Instant::now();
+                       $node.node.process_pending_htlc_forwards();
+               }}
+       }
+
+       #[test]
+       fn channel_reserve_test() {
+               use util::rng;
+               use std::sync::atomic::Ordering;
+               use ln::msgs::HandleError;
+
+               macro_rules! get_channel_value_stat {
+                       ($node: expr, $channel_id: expr) => {{
+                               let chan_lock = $node.node.channel_state.lock().unwrap();
+                               let chan = chan_lock.by_id.get(&$channel_id).unwrap();
+                               chan.get_value_stat()
+                       }}
+               }
+
+               let mut nodes = create_network(3);
+               let chan_1 = create_announced_chan_between_nodes_with_value(&nodes, 0, 1, 1900, 1001);
+               let chan_2 = create_announced_chan_between_nodes_with_value(&nodes, 1, 2, 1900, 1001);
+
+               let mut stat01 = get_channel_value_stat!(nodes[0], chan_1.2);
+               let mut stat11 = get_channel_value_stat!(nodes[1], chan_1.2);
+
+               let mut stat12 = get_channel_value_stat!(nodes[1], chan_2.2);
+               let mut stat22 = get_channel_value_stat!(nodes[2], chan_2.2);
+
+               macro_rules! get_route_and_payment_hash {
+                       ($recv_value: expr) => {{
+                               let route = nodes[0].router.get_route(&nodes.last().unwrap().node.get_our_node_id(), None, &Vec::new(), $recv_value, TEST_FINAL_CLTV).unwrap();
+                               let (payment_preimage, payment_hash) = get_payment_preimage_hash!(nodes[0]);
+                               (route, payment_hash, payment_preimage)
+                       }}
+               };
+
+               macro_rules! expect_forward {
+                       ($node: expr) => {{
+                               let mut events = $node.node.get_and_clear_pending_events();
+                               assert_eq!(events.len(), 1);
+                               check_added_monitors!($node, 1);
+                               let payment_event = SendEvent::from_event(events.remove(0));
+                               payment_event
+                       }}
+               }
+
+               macro_rules! expect_payment_received {
+                       ($node: expr, $expected_payment_hash: expr, $expected_recv_value: expr) => {
+                               let events = $node.node.get_and_clear_pending_events();
+                               assert_eq!(events.len(), 1);
+                               match events[0] {
+                                       Event::PaymentReceived { ref payment_hash, amt } => {
+                                               assert_eq!($expected_payment_hash, *payment_hash);
+                                               assert_eq!($expected_recv_value, amt);
+                                       },
+                                       _ => panic!("Unexpected event"),
+                               }
+                       }
+               };
+
+               let feemsat = 239; // somehow we know?
+               let total_fee_msat = (nodes.len() - 2) as u64 * 239;
+
+               let recv_value_0 = stat01.their_max_htlc_value_in_flight_msat - total_fee_msat;
+
+               // attempt to send amt_msat > their_max_htlc_value_in_flight_msat
+               {
+                       let (route, our_payment_hash, _) = get_route_and_payment_hash!(recv_value_0 + 1);
+                       assert!(route.hops.iter().rev().skip(1).all(|h| h.fee_msat == feemsat));
+                       let err = nodes[0].node.send_payment(route, our_payment_hash).err().unwrap();
+                       match err {
+                               APIError::ChannelUnavailable{err} => assert_eq!(err, "Cannot send value that would put us over our max HTLC value in flight"),
+                               _ => panic!("Unknown error variants"),
+                       }
+               }
+
+               let mut htlc_id = 0;
+               // channel reserve is bigger than their_max_htlc_value_in_flight_msat so loop to deplete
+               // nodes[0]'s wealth
+               loop {
+                       let amt_msat = recv_value_0 + total_fee_msat;
+                       if stat01.value_to_self_msat - amt_msat < stat01.channel_reserve_msat {
+                               break;
+                       }
+                       send_payment(&nodes[0], &vec![&nodes[1], &nodes[2]][..], recv_value_0);
+                       htlc_id += 1;
+
+                       let (stat01_, stat11_, stat12_, stat22_) = (
+                               get_channel_value_stat!(nodes[0], chan_1.2),
+                               get_channel_value_stat!(nodes[1], chan_1.2),
+                               get_channel_value_stat!(nodes[1], chan_2.2),
+                               get_channel_value_stat!(nodes[2], chan_2.2),
+                       );
+
+                       assert_eq!(stat01_.value_to_self_msat, stat01.value_to_self_msat - amt_msat);
+                       assert_eq!(stat11_.value_to_self_msat, stat11.value_to_self_msat + amt_msat);
+                       assert_eq!(stat12_.value_to_self_msat, stat12.value_to_self_msat - (amt_msat - feemsat));
+                       assert_eq!(stat22_.value_to_self_msat, stat22.value_to_self_msat + (amt_msat - feemsat));
+                       stat01 = stat01_; stat11 = stat11_; stat12 = stat12_; stat22 = stat22_;
+               }
+
+               {
+                       let recv_value = stat01.value_to_self_msat - stat01.channel_reserve_msat - total_fee_msat;
+                       // attempt to get channel_reserve violation
+                       let (route, our_payment_hash, _) = get_route_and_payment_hash!(recv_value + 1);
+                       let err = nodes[0].node.send_payment(route.clone(), our_payment_hash).err().unwrap();
+                       match err {
+                               APIError::ChannelUnavailable{err} => assert_eq!(err, "Cannot send value that would put us over our reserve value"),
+                               _ => panic!("Unknown error variants"),
+                       }
+               }
+
+               // adding pending output
+               let recv_value_1 = (stat01.value_to_self_msat - stat01.channel_reserve_msat - total_fee_msat)/2;
+               let amt_msat_1 = recv_value_1 + total_fee_msat;
+
+               let (route_1, our_payment_hash_1, our_payment_preimage_1) = get_route_and_payment_hash!(recv_value_1);
+               let payment_event_1 = {
+                       nodes[0].node.send_payment(route_1, our_payment_hash_1).unwrap();
+                       check_added_monitors!(nodes[0], 1);
+
+                       let mut events = nodes[0].node.get_and_clear_pending_events();
+                       assert_eq!(events.len(), 1);
+                       SendEvent::from_event(events.remove(0))
+               };
+               nodes[1].node.handle_update_add_htlc(&nodes[0].node.get_our_node_id(), &payment_event_1.msgs[0]).unwrap();
+
+               // channel reserve test with htlc pending output > 0
+               let recv_value_2 = stat01.value_to_self_msat - amt_msat_1 - stat01.channel_reserve_msat - total_fee_msat;
+               {
+                       let (route, our_payment_hash, _) = get_route_and_payment_hash!(recv_value_2 + 1);
+                       match nodes[0].node.send_payment(route, our_payment_hash).err().unwrap() {
+                               APIError::ChannelUnavailable{err} => assert_eq!(err, "Cannot send value that would put us over our reserve value"),
+                               _ => panic!("Unknown error variants"),
+                       }
+               }
+
+               {
+                       // test channel_reserve test on nodes[1] side
+                       let (route, our_payment_hash, _) = get_route_and_payment_hash!(recv_value_2 + 1);
+
+                       // Need to manually create update_add_htlc message to go around the channel reserve check in send_htlc()
+                       let secp_ctx = Secp256k1::new();
+                       let session_priv = SecretKey::from_slice(&secp_ctx, &{
+                               let mut session_key = [0; 32];
+                               rng::fill_bytes(&mut session_key);
+                               session_key
+                       }).expect("RNG is bad!");
+
+                       let cur_height = nodes[0].node.latest_block_height.load(Ordering::Acquire) as u32 + 1;
+                       let onion_keys = ChannelManager::construct_onion_keys(&secp_ctx, &route, &session_priv).unwrap();
+                       let (onion_payloads, htlc_msat, htlc_cltv) = ChannelManager::build_onion_payloads(&route, cur_height).unwrap();
+                       let onion_packet = ChannelManager::construct_onion_packet(onion_payloads, onion_keys, &our_payment_hash);
+                       let msg = msgs::UpdateAddHTLC {
+                               channel_id: chan_1.2,
+                               htlc_id,
+                               amount_msat: htlc_msat,
+                               payment_hash: our_payment_hash,
+                               cltv_expiry: htlc_cltv,
+                               onion_routing_packet: onion_packet,
+                       };
+
+                       let err = nodes[1].node.handle_update_add_htlc(&nodes[0].node.get_our_node_id(), &msg).err().unwrap();
+                       match err {
+                               HandleError{err, .. } => assert_eq!(err, "Remote HTLC add would put them over their reserve value"),
+                       }
+               }
+
+               // split the rest to test holding cell
+               let recv_value_21 = recv_value_2/2;
+               let recv_value_22 = recv_value_2 - recv_value_21 - total_fee_msat;
+               {
+                       let stat = get_channel_value_stat!(nodes[0], chan_1.2);
+                       assert_eq!(stat.value_to_self_msat - (stat.pending_outbound_htlcs_amount_msat + recv_value_21 + recv_value_22 + total_fee_msat + total_fee_msat), stat.channel_reserve_msat);
+               }
+
+               // now see if they go through on both sides
+               let (route_21, our_payment_hash_21, our_payment_preimage_21) = get_route_and_payment_hash!(recv_value_21);
+               // but this will stuck in the holding cell
+               nodes[0].node.send_payment(route_21, our_payment_hash_21).unwrap();
+               check_added_monitors!(nodes[0], 0);
+               let events = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events.len(), 0);
+
+               // test with outbound holding cell amount > 0
+               {
+                       let (route, our_payment_hash, _) = get_route_and_payment_hash!(recv_value_22+1);
+                       match nodes[0].node.send_payment(route, our_payment_hash).err().unwrap() {
+                               APIError::ChannelUnavailable{err} => assert_eq!(err, "Cannot send value that would put us over our reserve value"),
+                               _ => panic!("Unknown error variants"),
+                       }
+               }
+
+               let (route_22, our_payment_hash_22, our_payment_preimage_22) = get_route_and_payment_hash!(recv_value_22);
+               // this will also stuck in the holding cell
+               nodes[0].node.send_payment(route_22, our_payment_hash_22).unwrap();
+               check_added_monitors!(nodes[0], 0);
+               let events = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events.len(), 0);
+
+               // flush the pending htlc
+               let (as_revoke_and_ack, as_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &payment_event_1.commitment_msg).unwrap();
+               check_added_monitors!(nodes[1], 1);
+
+               let commitment_update_2 = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &as_revoke_and_ack).unwrap().unwrap();
+               check_added_monitors!(nodes[0], 1);
+               let (bs_revoke_and_ack, bs_none) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &as_commitment_signed.unwrap()).unwrap();
+               assert!(bs_none.is_none());
+               check_added_monitors!(nodes[0], 1);
+               assert!(nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &bs_revoke_and_ack).unwrap().is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               expect_pending_htlcs_forwardable!(nodes[1]);
+
+               let ref payment_event_11 = expect_forward!(nodes[1]);
+               nodes[2].node.handle_update_add_htlc(&nodes[1].node.get_our_node_id(), &payment_event_11.msgs[0]).unwrap();
+               commitment_signed_dance!(nodes[2], nodes[1], payment_event_11.commitment_msg, false);
+
+               expect_pending_htlcs_forwardable!(nodes[2]);
+               expect_payment_received!(nodes[2], our_payment_hash_1, recv_value_1);
+
+               // flush the htlcs in the holding cell
+               assert_eq!(commitment_update_2.update_add_htlcs.len(), 2);
+               nodes[1].node.handle_update_add_htlc(&nodes[0].node.get_our_node_id(), &commitment_update_2.update_add_htlcs[0]).unwrap();
+               nodes[1].node.handle_update_add_htlc(&nodes[0].node.get_our_node_id(), &commitment_update_2.update_add_htlcs[1]).unwrap();
+               commitment_signed_dance!(nodes[1], nodes[0], &commitment_update_2.commitment_signed, false);
+               expect_pending_htlcs_forwardable!(nodes[1]);
+
+               let ref payment_event_3 = expect_forward!(nodes[1]);
+               assert_eq!(payment_event_3.msgs.len(), 2);
+               nodes[2].node.handle_update_add_htlc(&nodes[1].node.get_our_node_id(), &payment_event_3.msgs[0]).unwrap();
+               nodes[2].node.handle_update_add_htlc(&nodes[1].node.get_our_node_id(), &payment_event_3.msgs[1]).unwrap();
+
+               commitment_signed_dance!(nodes[2], nodes[1], &payment_event_3.commitment_msg, false);
+               expect_pending_htlcs_forwardable!(nodes[2]);
+
+               let events = nodes[2].node.get_and_clear_pending_events();
+               assert_eq!(events.len(), 2);
+               match events[0] {
+                       Event::PaymentReceived { ref payment_hash, amt } => {
+                               assert_eq!(our_payment_hash_21, *payment_hash);
+                               assert_eq!(recv_value_21, amt);
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+               match events[1] {
+                       Event::PaymentReceived { ref payment_hash, amt } => {
+                               assert_eq!(our_payment_hash_22, *payment_hash);
+                               assert_eq!(recv_value_22, amt);
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               claim_payment(&nodes[0], &vec!(&nodes[1], &nodes[2]), our_payment_preimage_1);
+               claim_payment(&nodes[0], &vec!(&nodes[1], &nodes[2]), our_payment_preimage_21);
+               claim_payment(&nodes[0], &vec!(&nodes[1], &nodes[2]), our_payment_preimage_22);
+
+               let expected_value_to_self = stat01.value_to_self_msat - (recv_value_1 + total_fee_msat) - (recv_value_21 + total_fee_msat) - (recv_value_22 + total_fee_msat);
+               let stat0 = get_channel_value_stat!(nodes[0], chan_1.2);
+               assert_eq!(stat0.value_to_self_msat, expected_value_to_self);
+               assert_eq!(stat0.value_to_self_msat, stat0.channel_reserve_msat);
+
+               let stat2 = get_channel_value_stat!(nodes[2], chan_2.2);
+               assert_eq!(stat2.value_to_self_msat, stat22.value_to_self_msat + recv_value_1 + recv_value_21 + recv_value_22);
+       }
+
        #[test]
        fn channel_monitor_network_test() {
                // Simple test which builds a network of ChannelManagers, connects them to each other, and
@@ -3245,11 +4566,7 @@ mod tests {
                        ($node: expr, $prev_node: expr, $preimage: expr) => {
                                {
                                        assert!($node.node.claim_funds($preimage));
-                                       {
-                                               let mut added_monitors = $node.chan_monitor.added_monitors.lock().unwrap();
-                                               assert_eq!(added_monitors.len(), 1);
-                                               added_monitors.clear();
-                                       }
+                                       check_added_monitors!($node, 1);
 
                                        let events = $node.node.get_and_clear_pending_events();
                                        assert_eq!(events.len(), 1);
@@ -3283,25 +4600,34 @@ mod tests {
                assert_eq!(nodes[2].node.list_channels().len(), 0);
                assert_eq!(nodes[3].node.list_channels().len(), 1);
 
+               { // Cheat and reset nodes[4]'s height to 1
+                       let header = BlockHeader { version: 0x20000000, prev_blockhash: Default::default(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
+                       nodes[4].chain_monitor.block_connected_with_filtering(&Block { header, txdata: vec![] }, 1);
+               }
+
+               assert_eq!(nodes[3].node.latest_block_height.load(Ordering::Acquire), 1);
+               assert_eq!(nodes[4].node.latest_block_height.load(Ordering::Acquire), 1);
                // One pending HTLC to time out:
                let payment_preimage_2 = route_payment(&nodes[3], &vec!(&nodes[4])[..], 3000000).0;
+               // CLTV expires at TEST_FINAL_CLTV + 1 (current height) + 1 (added in send_payment for
+               // buffer space).
 
                {
                        let mut header = BlockHeader { version: 0x20000000, prev_blockhash: Default::default(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
-                       nodes[3].chain_monitor.block_connected_checked(&header, 1, &Vec::new()[..], &[0; 0]);
-                       for i in 2..TEST_FINAL_CLTV - 3 {
+                       nodes[3].chain_monitor.block_connected_checked(&header, 2, &Vec::new()[..], &[0; 0]);
+                       for i in 3..TEST_FINAL_CLTV + 2 + HTLC_FAIL_TIMEOUT_BLOCKS + 1 {
                                header = BlockHeader { version: 0x20000000, prev_blockhash: header.bitcoin_hash(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
                                nodes[3].chain_monitor.block_connected_checked(&header, i, &Vec::new()[..], &[0; 0]);
                        }
 
                        let node_txn = test_txn_broadcast(&nodes[3], &chan_4, None, HTLCType::TIMEOUT);
 
-                       // Claim the payment on nodes[3], giving it knowledge of the preimage
+                       // Claim the payment on nodes[4], giving it knowledge of the preimage
                        claim_funds!(nodes[4], nodes[3], payment_preimage_2);
 
                        header = BlockHeader { version: 0x20000000, prev_blockhash: Default::default(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
-                       nodes[4].chain_monitor.block_connected_checked(&header, 1, &Vec::new()[..], &[0; 0]);
-                       for i in 2..TEST_FINAL_CLTV - 3 {
+                       nodes[4].chain_monitor.block_connected_checked(&header, 2, &Vec::new()[..], &[0; 0]);
+                       for i in 3..TEST_FINAL_CLTV + 2 - CLTV_CLAIM_BUFFER + 1 {
                                header = BlockHeader { version: 0x20000000, prev_blockhash: header.bitcoin_hash(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
                                nodes[4].chain_monitor.block_connected_checked(&header, i, &Vec::new()[..], &[0; 0]);
                        }
@@ -3324,6 +4650,13 @@ mod tests {
                let payment_preimage_3 = route_payment(&nodes[0], &vec!(&nodes[1])[..], 3000000).0;
                // Get the will-be-revoked local txn from nodes[0]
                let revoked_local_txn = nodes[0].node.channel_state.lock().unwrap().by_id.iter().next().unwrap().1.last_local_commitment_txn.clone();
+               assert_eq!(revoked_local_txn.len(), 2); // First commitment tx, then HTLC tx
+               assert_eq!(revoked_local_txn[0].input.len(), 1);
+               assert_eq!(revoked_local_txn[0].input[0].previous_output.txid, chan_5.3.txid());
+               assert_eq!(revoked_local_txn[0].output.len(), 2); // Only HTLC and output back to 0 are present
+               assert_eq!(revoked_local_txn[1].input.len(), 1);
+               assert_eq!(revoked_local_txn[1].input[0].previous_output.txid, revoked_local_txn[0].txid());
+               assert_eq!(revoked_local_txn[1].input[0].witness.last().unwrap().len(), 133); // HTLC-Timeout
                // Revoke the old state
                claim_payment(&nodes[0], &vec!(&nodes[1])[..], payment_preimage_3);
 
@@ -3332,12 +4665,11 @@ mod tests {
                        nodes[1].chain_monitor.block_connected_with_filtering(&Block { header, txdata: vec![revoked_local_txn[0].clone()] }, 1);
                        {
                                let mut node_txn = nodes[1].tx_broadcaster.txn_broadcasted.lock().unwrap();
-                               assert_eq!(node_txn.len(), 2);
-                               assert_eq!(node_txn[0].input.len(), 1);
+                               assert_eq!(node_txn.len(), 3);
+                               assert_eq!(node_txn.pop().unwrap(), node_txn[0]); // An outpoint registration will result in a 2nd block_connected
+                               assert_eq!(node_txn[0].input.len(), 2); // We should claim the revoked output and the HTLC output
 
-                               let mut funding_tx_map = HashMap::new();
-                               funding_tx_map.insert(revoked_local_txn[0].txid(), revoked_local_txn[0].clone());
-                               node_txn[0].verify(&funding_tx_map).unwrap();
+                               check_spends!(node_txn[0], revoked_local_txn[0].clone());
                                node_txn.swap_remove(0);
                        }
                        test_txn_broadcast(&nodes[1], &chan_5, None, HTLCType::NONE);
@@ -3346,19 +4678,316 @@ mod tests {
                        let node_txn = test_txn_broadcast(&nodes[0], &chan_5, Some(revoked_local_txn[0].clone()), HTLCType::TIMEOUT);
                        header = BlockHeader { version: 0x20000000, prev_blockhash: header.bitcoin_hash(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
                        nodes[1].chain_monitor.block_connected_with_filtering(&Block { header, txdata: vec![node_txn[1].clone()] }, 1);
-
-                       //TODO: At this point nodes[1] should claim the revoked HTLC-Timeout output, but that's
-                       //not yet implemented in ChannelMonitor
+                       test_revoked_htlc_claim_txn_broadcast(&nodes[1], node_txn[1].clone());
                }
                get_announce_close_broadcast_events(&nodes, 0, 1);
                assert_eq!(nodes[0].node.list_channels().len(), 0);
                assert_eq!(nodes[1].node.list_channels().len(), 0);
+       }
 
-               // Check that we processed all pending events
-               for node in nodes {
-                       assert_eq!(node.node.get_and_clear_pending_events().len(), 0);
-                       assert_eq!(node.chan_monitor.added_monitors.lock().unwrap().len(), 0);
+       #[test]
+       fn revoked_output_claim() {
+               // Simple test to ensure a node will claim a revoked output when a stale remote commitment
+               // transaction is broadcast by its counterparty
+               let nodes = create_network(2);
+               let chan_1 = create_announced_chan_between_nodes(&nodes, 0, 1);
+               // node[0] is gonna to revoke an old state thus node[1] should be able to claim the revoked output
+               let revoked_local_txn = nodes[0].node.channel_state.lock().unwrap().by_id.get(&chan_1.2).unwrap().last_local_commitment_txn.clone();
+               assert_eq!(revoked_local_txn.len(), 1);
+               // Only output is the full channel value back to nodes[0]:
+               assert_eq!(revoked_local_txn[0].output.len(), 1);
+               // Send a payment through, updating everyone's latest commitment txn
+               send_payment(&nodes[0], &vec!(&nodes[1])[..], 5000000);
+
+               // Inform nodes[1] that nodes[0] broadcast a stale tx
+               let header = BlockHeader { version: 0x20000000, prev_blockhash: Default::default(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
+               nodes[1].chain_monitor.block_connected_with_filtering(&Block { header, txdata: vec![revoked_local_txn[0].clone()] }, 1);
+               let node_txn = nodes[1].tx_broadcaster.txn_broadcasted.lock().unwrap();
+               assert_eq!(node_txn.len(), 3); // nodes[1] will broadcast justice tx twice, and its own local state once
+
+               assert_eq!(node_txn[0], node_txn[2]);
+
+               check_spends!(node_txn[0], revoked_local_txn[0].clone());
+               check_spends!(node_txn[1], chan_1.3.clone());
+
+               // Inform nodes[0] that a watchtower cheated on its behalf, so it will force-close the chan
+               nodes[0].chain_monitor.block_connected_with_filtering(&Block { header, txdata: vec![revoked_local_txn[0].clone()] }, 1);
+               get_announce_close_broadcast_events(&nodes, 0, 1);
+       }
+
+       #[test]
+       fn claim_htlc_outputs_shared_tx() {
+               // Node revoked old state, htlcs haven't time out yet, claim them in shared justice tx
+               let nodes = create_network(2);
+
+               // Create some new channel:
+               let chan_1 = create_announced_chan_between_nodes(&nodes, 0, 1);
+
+               // Rebalance the network to generate htlc in the two directions
+               send_payment(&nodes[0], &vec!(&nodes[1])[..], 8000000);
+               // node[0] is gonna to revoke an old state thus node[1] should be able to claim both offered/received HTLC outputs on top of commitment tx
+               let payment_preimage_1 = route_payment(&nodes[0], &vec!(&nodes[1])[..], 3000000).0;
+               let _payment_preimage_2 = route_payment(&nodes[1], &vec!(&nodes[0])[..], 3000000).0;
+
+               // Get the will-be-revoked local txn from node[0]
+               let revoked_local_txn = nodes[0].node.channel_state.lock().unwrap().by_id.get(&chan_1.2).unwrap().last_local_commitment_txn.clone();
+               assert_eq!(revoked_local_txn.len(), 2); // commitment tx + 1 HTLC-Timeout tx
+               assert_eq!(revoked_local_txn[0].input.len(), 1);
+               assert_eq!(revoked_local_txn[0].input[0].previous_output.txid, chan_1.3.txid());
+               assert_eq!(revoked_local_txn[1].input.len(), 1);
+               assert_eq!(revoked_local_txn[1].input[0].previous_output.txid, revoked_local_txn[0].txid());
+               assert_eq!(revoked_local_txn[1].input[0].witness.last().unwrap().len(), 133); // HTLC-Timeout
+               check_spends!(revoked_local_txn[1], revoked_local_txn[0].clone());
+
+               //Revoke the old state
+               claim_payment(&nodes[0], &vec!(&nodes[1])[..], payment_preimage_1);
+
+               {
+                       let header = BlockHeader { version: 0x20000000, prev_blockhash: Default::default(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
+
+                       nodes[0].chain_monitor.block_connected_with_filtering(&Block { header, txdata: vec![revoked_local_txn[0].clone()] }, 1);
+
+                       nodes[1].chain_monitor.block_connected_with_filtering(&Block { header, txdata: vec![revoked_local_txn[0].clone()] }, 1);
+                       let node_txn = nodes[1].tx_broadcaster.txn_broadcasted.lock().unwrap();
+                       assert_eq!(node_txn.len(), 4);
+
+                       assert_eq!(node_txn[0].input.len(), 3); // Claim the revoked output + both revoked HTLC outputs
+                       check_spends!(node_txn[0], revoked_local_txn[0].clone());
+
+                       assert_eq!(node_txn[0], node_txn[3]); // justice tx is duplicated due to block re-scanning
+
+                       let mut witness_lens = BTreeSet::new();
+                       witness_lens.insert(node_txn[0].input[0].witness.last().unwrap().len());
+                       witness_lens.insert(node_txn[0].input[1].witness.last().unwrap().len());
+                       witness_lens.insert(node_txn[0].input[2].witness.last().unwrap().len());
+                       assert_eq!(witness_lens.len(), 3);
+                       assert_eq!(*witness_lens.iter().skip(0).next().unwrap(), 77); // revoked to_local
+                       assert_eq!(*witness_lens.iter().skip(1).next().unwrap(), 133); // revoked offered HTLC
+                       assert_eq!(*witness_lens.iter().skip(2).next().unwrap(), 138); // revoked received HTLC
+
+                       // Next nodes[1] broadcasts its current local tx state:
+                       assert_eq!(node_txn[1].input.len(), 1);
+                       assert_eq!(node_txn[1].input[0].previous_output.txid, chan_1.3.txid()); //Spending funding tx unique txouput, tx broadcasted by ChannelManager
+
+                       assert_eq!(node_txn[2].input.len(), 1);
+                       let witness_script = node_txn[2].clone().input[0].witness.pop().unwrap();
+                       assert_eq!(witness_script.len(), 133); //Spending an offered htlc output
+                       assert_eq!(node_txn[2].input[0].previous_output.txid, node_txn[1].txid());
+                       assert_ne!(node_txn[2].input[0].previous_output.txid, node_txn[0].input[0].previous_output.txid);
+                       assert_ne!(node_txn[2].input[0].previous_output.txid, node_txn[0].input[1].previous_output.txid);
+               }
+               get_announce_close_broadcast_events(&nodes, 0, 1);
+               assert_eq!(nodes[0].node.list_channels().len(), 0);
+               assert_eq!(nodes[1].node.list_channels().len(), 0);
+       }
+
+       #[test]
+       fn claim_htlc_outputs_single_tx() {
+               // Node revoked old state, htlcs have timed out, claim each of them in separated justice tx
+               let nodes = create_network(2);
+
+               let chan_1 = create_announced_chan_between_nodes(&nodes, 0, 1);
+
+               // Rebalance the network to generate htlc in the two directions
+               send_payment(&nodes[0], &vec!(&nodes[1])[..], 8000000);
+               // node[0] is gonna to revoke an old state thus node[1] should be able to claim both offered/received HTLC outputs on top of commitment tx, but this
+               // time as two different claim transactions as we're gonna to timeout htlc with given a high current height
+               let payment_preimage_1 = route_payment(&nodes[0], &vec!(&nodes[1])[..], 3000000).0;
+               let _payment_preimage_2 = route_payment(&nodes[1], &vec!(&nodes[0])[..], 3000000).0;
+
+               // Get the will-be-revoked local txn from node[0]
+               let revoked_local_txn = nodes[0].node.channel_state.lock().unwrap().by_id.get(&chan_1.2).unwrap().last_local_commitment_txn.clone();
+
+               //Revoke the old state
+               claim_payment(&nodes[0], &vec!(&nodes[1])[..], payment_preimage_1);
+
+               {
+                       let header = BlockHeader { version: 0x20000000, prev_blockhash: Default::default(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
+
+                       nodes[0].chain_monitor.block_connected_with_filtering(&Block { header, txdata: vec![revoked_local_txn[0].clone()] }, 200);
+
+                       nodes[1].chain_monitor.block_connected_with_filtering(&Block { header, txdata: vec![revoked_local_txn[0].clone()] }, 200);
+                       let node_txn = nodes[1].tx_broadcaster.txn_broadcasted.lock().unwrap();
+                       assert_eq!(node_txn.len(), 12); // ChannelManager : 2, ChannelMontitor: 8 (1 standard revoked output, 2 revocation htlc tx, 1 local commitment tx + 1 htlc timeout tx) * 2 (block-rescan)
+
+                       assert_eq!(node_txn[0], node_txn[7]);
+                       assert_eq!(node_txn[1], node_txn[8]);
+                       assert_eq!(node_txn[2], node_txn[9]);
+                       assert_eq!(node_txn[3], node_txn[10]);
+                       assert_eq!(node_txn[4], node_txn[11]);
+                       assert_eq!(node_txn[3], node_txn[5]); //local commitment tx + htlc timeout tx broadcated by ChannelManger
+                       assert_eq!(node_txn[4], node_txn[6]);
+
+                       assert_eq!(node_txn[0].input.len(), 1);
+                       assert_eq!(node_txn[1].input.len(), 1);
+                       assert_eq!(node_txn[2].input.len(), 1);
+
+                       let mut revoked_tx_map = HashMap::new();
+                       revoked_tx_map.insert(revoked_local_txn[0].txid(), revoked_local_txn[0].clone());
+                       node_txn[0].verify(&revoked_tx_map).unwrap();
+                       node_txn[1].verify(&revoked_tx_map).unwrap();
+                       node_txn[2].verify(&revoked_tx_map).unwrap();
+
+                       let mut witness_lens = BTreeSet::new();
+                       witness_lens.insert(node_txn[0].input[0].witness.last().unwrap().len());
+                       witness_lens.insert(node_txn[1].input[0].witness.last().unwrap().len());
+                       witness_lens.insert(node_txn[2].input[0].witness.last().unwrap().len());
+                       assert_eq!(witness_lens.len(), 3);
+                       assert_eq!(*witness_lens.iter().skip(0).next().unwrap(), 77); // revoked to_local
+                       assert_eq!(*witness_lens.iter().skip(1).next().unwrap(), 133); // revoked offered HTLC
+                       assert_eq!(*witness_lens.iter().skip(2).next().unwrap(), 138); // revoked received HTLC
+
+                       assert_eq!(node_txn[3].input.len(), 1);
+                       check_spends!(node_txn[3], chan_1.3.clone());
+
+                       assert_eq!(node_txn[4].input.len(), 1);
+                       let witness_script = node_txn[4].input[0].witness.last().unwrap();
+                       assert_eq!(witness_script.len(), 133); //Spending an offered htlc output
+                       assert_eq!(node_txn[4].input[0].previous_output.txid, node_txn[3].txid());
+                       assert_ne!(node_txn[4].input[0].previous_output.txid, node_txn[0].input[0].previous_output.txid);
+                       assert_ne!(node_txn[4].input[0].previous_output.txid, node_txn[1].input[0].previous_output.txid);
+               }
+               get_announce_close_broadcast_events(&nodes, 0, 1);
+               assert_eq!(nodes[0].node.list_channels().len(), 0);
+               assert_eq!(nodes[1].node.list_channels().len(), 0);
+       }
+
+       #[test]
+       fn test_htlc_ignore_latest_remote_commitment() {
+               // Test that HTLC transactions spending the latest remote commitment transaction are simply
+               // ignored if we cannot claim them. This originally tickled an invalid unwrap().
+               let nodes = create_network(2);
+               create_announced_chan_between_nodes(&nodes, 0, 1);
+
+               route_payment(&nodes[0], &[&nodes[1]], 10000000);
+               nodes[0].node.force_close_channel(&nodes[0].node.list_channels()[0].channel_id);
+               {
+                       let events = nodes[0].node.get_and_clear_pending_events();
+                       assert_eq!(events.len(), 1);
+                       match events[0] {
+                               Event::BroadcastChannelUpdate { msg: msgs::ChannelUpdate { contents: msgs::UnsignedChannelUpdate { flags, .. }, .. } } => {
+                                       assert_eq!(flags & 0b10, 0b10);
+                               },
+                               _ => panic!("Unexpected event"),
+                       }
+               }
+
+               let node_txn = nodes[0].tx_broadcaster.txn_broadcasted.lock().unwrap();
+               assert_eq!(node_txn.len(), 2);
+
+               let header = BlockHeader { version: 0x20000000, prev_blockhash: Default::default(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
+               nodes[1].chain_monitor.block_connected_checked(&header, 1, &[&node_txn[0], &node_txn[1]], &[1; 2]);
+
+               {
+                       let events = nodes[1].node.get_and_clear_pending_events();
+                       assert_eq!(events.len(), 1);
+                       match events[0] {
+                               Event::BroadcastChannelUpdate { msg: msgs::ChannelUpdate { contents: msgs::UnsignedChannelUpdate { flags, .. }, .. } } => {
+                                       assert_eq!(flags & 0b10, 0b10);
+                               },
+                               _ => panic!("Unexpected event"),
+                       }
                }
+
+               // Duplicate the block_connected call since this may happen due to other listeners
+               // registering new transactions
+               nodes[1].chain_monitor.block_connected_checked(&header, 1, &[&node_txn[0], &node_txn[1]], &[1; 2]);
+       }
+
+       #[test]
+       fn test_force_close_fail_back() {
+               // Check which HTLCs are failed-backwards on channel force-closure
+               let mut nodes = create_network(3);
+               create_announced_chan_between_nodes(&nodes, 0, 1);
+               create_announced_chan_between_nodes(&nodes, 1, 2);
+
+               let route = nodes[0].router.get_route(&nodes[2].node.get_our_node_id(), None, &Vec::new(), 1000000, 42).unwrap();
+
+               let (our_payment_preimage, our_payment_hash) = get_payment_preimage_hash!(nodes[0]);
+
+               let mut payment_event = {
+                       nodes[0].node.send_payment(route, our_payment_hash).unwrap();
+                       check_added_monitors!(nodes[0], 1);
+
+                       let mut events = nodes[0].node.get_and_clear_pending_events();
+                       assert_eq!(events.len(), 1);
+                       SendEvent::from_event(events.remove(0))
+               };
+
+               nodes[1].node.handle_update_add_htlc(&nodes[0].node.get_our_node_id(), &payment_event.msgs[0]).unwrap();
+               commitment_signed_dance!(nodes[1], nodes[0], payment_event.commitment_msg, false);
+
+               let events_1 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_1.len(), 1);
+               match events_1[0] {
+                       Event::PendingHTLCsForwardable { .. } => { },
+                       _ => panic!("Unexpected event"),
+               };
+
+               nodes[1].node.channel_state.lock().unwrap().next_forward = Instant::now();
+               nodes[1].node.process_pending_htlc_forwards();
+
+               let mut events_2 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_2.len(), 1);
+               payment_event = SendEvent::from_event(events_2.remove(0));
+               assert_eq!(payment_event.msgs.len(), 1);
+
+               check_added_monitors!(nodes[1], 1);
+               nodes[2].node.handle_update_add_htlc(&nodes[1].node.get_our_node_id(), &payment_event.msgs[0]).unwrap();
+               nodes[2].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &payment_event.commitment_msg).unwrap();
+               check_added_monitors!(nodes[2], 1);
+
+               // nodes[2] now has the latest commitment transaction, but hasn't revoked its previous
+               // state or updated nodes[1]' state. Now force-close and broadcast that commitment/HTLC
+               // transaction and ensure nodes[1] doesn't fail-backwards (this was originally a bug!).
+
+               nodes[2].node.force_close_channel(&payment_event.commitment_msg.channel_id);
+               let events_3 = nodes[2].node.get_and_clear_pending_events();
+               assert_eq!(events_3.len(), 1);
+               match events_3[0] {
+                       Event::BroadcastChannelUpdate { msg: msgs::ChannelUpdate { contents: msgs::UnsignedChannelUpdate { flags, .. }, .. } } => {
+                               assert_eq!(flags & 0b10, 0b10);
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               let tx = {
+                       let mut node_txn = nodes[2].tx_broadcaster.txn_broadcasted.lock().unwrap();
+                       // Note that we don't bother broadcasting the HTLC-Success transaction here as we don't
+                       // have a use for it unless nodes[2] learns the preimage somehow, the funds will go
+                       // back to nodes[1] upon timeout otherwise.
+                       assert_eq!(node_txn.len(), 1);
+                       node_txn.remove(0)
+               };
+
+               let header = BlockHeader { version: 0x20000000, prev_blockhash: Default::default(), merkle_root: Default::default(), time: 42, bits: 42, nonce: 42 };
+               nodes[1].chain_monitor.block_connected_checked(&header, 1, &[&tx], &[1]);
+
+               let events_4 = nodes[1].node.get_and_clear_pending_events();
+               // Note no UpdateHTLCs event here from nodes[1] to nodes[0]!
+               assert_eq!(events_4.len(), 1);
+               match events_4[0] {
+                       Event::BroadcastChannelUpdate { msg: msgs::ChannelUpdate { contents: msgs::UnsignedChannelUpdate { flags, .. }, .. } } => {
+                               assert_eq!(flags & 0b10, 0b10);
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               // Now check that if we add the preimage to ChannelMonitor it broadcasts our HTLC-Success..
+               {
+                       let mut monitors = nodes[2].chan_monitor.simple_monitor.monitors.lock().unwrap();
+                       monitors.get_mut(&OutPoint::new(Sha256dHash::from(&payment_event.commitment_msg.channel_id[..]), 0)).unwrap()
+                               .provide_payment_preimage(&our_payment_hash, &our_payment_preimage);
+               }
+               nodes[2].chain_monitor.block_connected_checked(&header, 1, &[&tx], &[1]);
+               let node_txn = nodes[2].tx_broadcaster.txn_broadcasted.lock().unwrap();
+               assert_eq!(node_txn.len(), 1);
+               assert_eq!(node_txn[0].input.len(), 1);
+               assert_eq!(node_txn[0].input[0].previous_output.txid, tx.txid());
+               assert_eq!(node_txn[0].lock_time, 0); // Must be an HTLC-Success
+               assert_eq!(node_txn[0].input[0].witness.len(), 5); // Must be an HTLC-Success
+
+               check_spends!(node_txn[0], tx);
        }
 
        #[test]
@@ -3382,11 +5011,1016 @@ mod tests {
                while !headers.is_empty() {
                        nodes[0].node.block_disconnected(&headers.pop().unwrap());
                }
+               {
+                       let events = nodes[0].node.get_and_clear_pending_events();
+                       assert_eq!(events.len(), 1);
+                       match events[0] {
+                               Event::BroadcastChannelUpdate { msg: msgs::ChannelUpdate { contents: msgs::UnsignedChannelUpdate { flags, .. }, .. } } => {
+                                       assert_eq!(flags & 0b10, 0b10);
+                               },
+                               _ => panic!("Unexpected event"),
+                       }
+               }
                let channel_state = nodes[0].node.channel_state.lock().unwrap();
                assert_eq!(channel_state.by_id.len(), 0);
                assert_eq!(channel_state.short_to_id.len(), 0);
        }
 
+       /// pending_htlc_adds includes both the holding cell and in-flight update_add_htlcs, whereas
+       /// for claims/fails they are separated out.
+       fn reconnect_nodes(node_a: &Node, node_b: &Node, pre_all_htlcs: bool, pending_htlc_adds: (i64, i64), pending_htlc_claims: (usize, usize), pending_cell_htlc_claims: (usize, usize), pending_cell_htlc_fails: (usize, usize), pending_raa: (bool, bool)) {
+               let reestablish_1 = node_a.node.peer_connected(&node_b.node.get_our_node_id());
+               let reestablish_2 = node_b.node.peer_connected(&node_a.node.get_our_node_id());
+
+               let mut resp_1 = Vec::new();
+               for msg in reestablish_1 {
+                       resp_1.push(node_b.node.handle_channel_reestablish(&node_a.node.get_our_node_id(), &msg).unwrap());
+               }
+               if pending_cell_htlc_claims.0 != 0 || pending_cell_htlc_fails.0 != 0 {
+                       check_added_monitors!(node_b, 1);
+               } else {
+                       check_added_monitors!(node_b, 0);
+               }
+
+               let mut resp_2 = Vec::new();
+               for msg in reestablish_2 {
+                       resp_2.push(node_a.node.handle_channel_reestablish(&node_b.node.get_our_node_id(), &msg).unwrap());
+               }
+               if pending_cell_htlc_claims.1 != 0 || pending_cell_htlc_fails.1 != 0 {
+                       check_added_monitors!(node_a, 1);
+               } else {
+                       check_added_monitors!(node_a, 0);
+               }
+
+               // We dont yet support both needing updates, as that would require a different commitment dance:
+               assert!((pending_htlc_adds.0 == 0 && pending_htlc_claims.0 == 0 && pending_cell_htlc_claims.0 == 0 && pending_cell_htlc_fails.0 == 0) ||
+                       (pending_htlc_adds.1 == 0 && pending_htlc_claims.1 == 0 && pending_cell_htlc_claims.1 == 0 && pending_cell_htlc_fails.1 == 0));
+
+               for chan_msgs in resp_1.drain(..) {
+                       if pre_all_htlcs {
+                               let a = node_a.node.handle_funding_locked(&node_b.node.get_our_node_id(), &chan_msgs.0.unwrap());
+                               let _announcement_sigs_opt = a.unwrap();
+                               //TODO: Test announcement_sigs re-sending when we've implemented it
+                       } else {
+                               assert!(chan_msgs.0.is_none());
+                       }
+                       if pending_raa.0 {
+                               assert!(chan_msgs.3 == msgs::RAACommitmentOrder::RevokeAndACKFirst);
+                               assert!(node_a.node.handle_revoke_and_ack(&node_b.node.get_our_node_id(), &chan_msgs.1.unwrap()).unwrap().is_none());
+                               check_added_monitors!(node_a, 1);
+                       } else {
+                               assert!(chan_msgs.1.is_none());
+                       }
+                       if pending_htlc_adds.0 != 0 || pending_htlc_claims.0 != 0 || pending_cell_htlc_claims.0 != 0 || pending_cell_htlc_fails.0 != 0 {
+                               let commitment_update = chan_msgs.2.unwrap();
+                               if pending_htlc_adds.0 != -1 { // We use -1 to denote a response commitment_signed
+                                       assert_eq!(commitment_update.update_add_htlcs.len(), pending_htlc_adds.0 as usize);
+                               } else {
+                                       assert!(commitment_update.update_add_htlcs.is_empty());
+                               }
+                               assert_eq!(commitment_update.update_fulfill_htlcs.len(), pending_htlc_claims.0 + pending_cell_htlc_claims.0);
+                               assert_eq!(commitment_update.update_fail_htlcs.len(), pending_cell_htlc_fails.0);
+                               assert!(commitment_update.update_fail_malformed_htlcs.is_empty());
+                               for update_add in commitment_update.update_add_htlcs {
+                                       node_a.node.handle_update_add_htlc(&node_b.node.get_our_node_id(), &update_add).unwrap();
+                               }
+                               for update_fulfill in commitment_update.update_fulfill_htlcs {
+                                       node_a.node.handle_update_fulfill_htlc(&node_b.node.get_our_node_id(), &update_fulfill).unwrap();
+                               }
+                               for update_fail in commitment_update.update_fail_htlcs {
+                                       node_a.node.handle_update_fail_htlc(&node_b.node.get_our_node_id(), &update_fail).unwrap();
+                               }
+
+                               if pending_htlc_adds.0 != -1 { // We use -1 to denote a response commitment_signed
+                                       commitment_signed_dance!(node_a, node_b, commitment_update.commitment_signed, false);
+                               } else {
+                                       let (as_revoke_and_ack, as_commitment_signed) = node_a.node.handle_commitment_signed(&node_b.node.get_our_node_id(), &commitment_update.commitment_signed).unwrap();
+                                       check_added_monitors!(node_a, 1);
+                                       assert!(as_commitment_signed.is_none());
+                                       assert!(node_b.node.handle_revoke_and_ack(&node_a.node.get_our_node_id(), &as_revoke_and_ack).unwrap().is_none());
+                                       check_added_monitors!(node_b, 1);
+                               }
+                       } else {
+                               assert!(chan_msgs.2.is_none());
+                       }
+               }
+
+               for chan_msgs in resp_2.drain(..) {
+                       if pre_all_htlcs {
+                               let _announcement_sigs_opt = node_b.node.handle_funding_locked(&node_a.node.get_our_node_id(), &chan_msgs.0.unwrap()).unwrap();
+                               //TODO: Test announcement_sigs re-sending when we've implemented it
+                       } else {
+                               assert!(chan_msgs.0.is_none());
+                       }
+                       if pending_raa.1 {
+                               assert!(chan_msgs.3 == msgs::RAACommitmentOrder::RevokeAndACKFirst);
+                               assert!(node_b.node.handle_revoke_and_ack(&node_a.node.get_our_node_id(), &chan_msgs.1.unwrap()).unwrap().is_none());
+                               check_added_monitors!(node_b, 1);
+                       } else {
+                               assert!(chan_msgs.1.is_none());
+                       }
+                       if pending_htlc_adds.1 != 0 || pending_htlc_claims.1 != 0 || pending_cell_htlc_claims.1 != 0 || pending_cell_htlc_fails.1 != 0 {
+                               let commitment_update = chan_msgs.2.unwrap();
+                               if pending_htlc_adds.1 != -1 { // We use -1 to denote a response commitment_signed
+                                       assert_eq!(commitment_update.update_add_htlcs.len(), pending_htlc_adds.1 as usize);
+                               }
+                               assert_eq!(commitment_update.update_fulfill_htlcs.len(), pending_htlc_claims.0 + pending_cell_htlc_claims.0);
+                               assert_eq!(commitment_update.update_fail_htlcs.len(), pending_cell_htlc_fails.0);
+                               assert!(commitment_update.update_fail_malformed_htlcs.is_empty());
+                               for update_add in commitment_update.update_add_htlcs {
+                                       node_b.node.handle_update_add_htlc(&node_a.node.get_our_node_id(), &update_add).unwrap();
+                               }
+                               for update_fulfill in commitment_update.update_fulfill_htlcs {
+                                       node_b.node.handle_update_fulfill_htlc(&node_a.node.get_our_node_id(), &update_fulfill).unwrap();
+                               }
+                               for update_fail in commitment_update.update_fail_htlcs {
+                                       node_b.node.handle_update_fail_htlc(&node_a.node.get_our_node_id(), &update_fail).unwrap();
+                               }
+
+                               if pending_htlc_adds.1 != -1 { // We use -1 to denote a response commitment_signed
+                                       commitment_signed_dance!(node_b, node_a, commitment_update.commitment_signed, false);
+                               } else {
+                                       let (bs_revoke_and_ack, bs_commitment_signed) = node_b.node.handle_commitment_signed(&node_a.node.get_our_node_id(), &commitment_update.commitment_signed).unwrap();
+                                       check_added_monitors!(node_b, 1);
+                                       assert!(bs_commitment_signed.is_none());
+                                       assert!(node_a.node.handle_revoke_and_ack(&node_b.node.get_our_node_id(), &bs_revoke_and_ack).unwrap().is_none());
+                                       check_added_monitors!(node_a, 1);
+                               }
+                       } else {
+                               assert!(chan_msgs.2.is_none());
+                       }
+               }
+       }
+
+       #[test]
+       fn test_simple_peer_disconnect() {
+               // Test that we can reconnect when there are no lost messages
+               let nodes = create_network(3);
+               create_announced_chan_between_nodes(&nodes, 0, 1);
+               create_announced_chan_between_nodes(&nodes, 1, 2);
+
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+               reconnect_nodes(&nodes[0], &nodes[1], true, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+
+               let payment_preimage_1 = route_payment(&nodes[0], &vec!(&nodes[1], &nodes[2])[..], 1000000).0;
+               let payment_hash_2 = route_payment(&nodes[0], &vec!(&nodes[1], &nodes[2])[..], 1000000).1;
+               fail_payment(&nodes[0], &vec!(&nodes[1], &nodes[2]), payment_hash_2);
+               claim_payment(&nodes[0], &vec!(&nodes[1], &nodes[2]), payment_preimage_1);
+
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+               reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+
+               let payment_preimage_3 = route_payment(&nodes[0], &vec!(&nodes[1], &nodes[2])[..], 1000000).0;
+               let payment_preimage_4 = route_payment(&nodes[0], &vec!(&nodes[1], &nodes[2])[..], 1000000).0;
+               let payment_hash_5 = route_payment(&nodes[0], &vec!(&nodes[1], &nodes[2])[..], 1000000).1;
+               let payment_hash_6 = route_payment(&nodes[0], &vec!(&nodes[1], &nodes[2])[..], 1000000).1;
+
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+
+               claim_payment_along_route(&nodes[0], &vec!(&nodes[1], &nodes[2]), true, payment_preimage_3);
+               fail_payment_along_route(&nodes[0], &[&nodes[1], &nodes[2]], true, payment_hash_5);
+
+               reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (0, 0), (1, 0), (1, 0), (false, false));
+               {
+                       let events = nodes[0].node.get_and_clear_pending_events();
+                       assert_eq!(events.len(), 2);
+                       match events[0] {
+                               Event::PaymentSent { payment_preimage } => {
+                                       assert_eq!(payment_preimage, payment_preimage_3);
+                               },
+                               _ => panic!("Unexpected event"),
+                       }
+                       match events[1] {
+                               Event::PaymentFailed { payment_hash, rejected_by_dest } => {
+                                       assert_eq!(payment_hash, payment_hash_5);
+                                       assert!(rejected_by_dest);
+                               },
+                               _ => panic!("Unexpected event"),
+                       }
+               }
+
+               claim_payment(&nodes[0], &vec!(&nodes[1], &nodes[2]), payment_preimage_4);
+               fail_payment(&nodes[0], &vec!(&nodes[1], &nodes[2]), payment_hash_6);
+       }
+
+       fn do_test_drop_messages_peer_disconnect(messages_delivered: u8) {
+               // Test that we can reconnect when in-flight HTLC updates get dropped
+               let mut nodes = create_network(2);
+               if messages_delivered == 0 {
+                       create_chan_between_nodes_with_value_a(&nodes[0], &nodes[1], 100000, 10001);
+                       // nodes[1] doesn't receive the funding_locked message (it'll be re-sent on reconnect)
+               } else {
+                       create_announced_chan_between_nodes(&nodes, 0, 1);
+               }
+
+               let route = nodes[0].router.get_route(&nodes[1].node.get_our_node_id(), Some(&nodes[0].node.list_usable_channels()), &Vec::new(), 1000000, TEST_FINAL_CLTV).unwrap();
+               let (payment_preimage_1, payment_hash_1) = get_payment_preimage_hash!(nodes[0]);
+
+               let payment_event = {
+                       nodes[0].node.send_payment(route.clone(), payment_hash_1).unwrap();
+                       check_added_monitors!(nodes[0], 1);
+
+                       let mut events = nodes[0].node.get_and_clear_pending_events();
+                       assert_eq!(events.len(), 1);
+                       SendEvent::from_event(events.remove(0))
+               };
+               assert_eq!(nodes[1].node.get_our_node_id(), payment_event.node_id);
+
+               if messages_delivered < 2 {
+                       // Drop the payment_event messages, and let them get re-generated in reconnect_nodes!
+               } else {
+                       nodes[1].node.handle_update_add_htlc(&nodes[0].node.get_our_node_id(), &payment_event.msgs[0]).unwrap();
+                       let (bs_revoke_and_ack, bs_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &payment_event.commitment_msg).unwrap();
+                       check_added_monitors!(nodes[1], 1);
+
+                       if messages_delivered >= 3 {
+                               assert!(nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_revoke_and_ack).unwrap().is_none());
+                               check_added_monitors!(nodes[0], 1);
+
+                               if messages_delivered >= 4 {
+                                       let (as_revoke_and_ack, as_commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &bs_commitment_signed.unwrap()).unwrap();
+                                       assert!(as_commitment_signed.is_none());
+                                       check_added_monitors!(nodes[0], 1);
+
+                                       if messages_delivered >= 5 {
+                                               assert!(nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &as_revoke_and_ack).unwrap().is_none());
+                                               check_added_monitors!(nodes[1], 1);
+                                       }
+                               }
+                       }
+               }
+
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+               if messages_delivered < 2 {
+                       // Even if the funding_locked messages get exchanged, as long as nothing further was
+                       // received on either side, both sides will need to resend them.
+                       reconnect_nodes(&nodes[0], &nodes[1], true, (0, 1), (0, 0), (0, 0), (0, 0), (false, false));
+               } else if messages_delivered == 2 {
+                       // nodes[0] still wants its RAA + commitment_signed
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (-1, 0), (0, 0), (0, 0), (0, 0), (true, false));
+               } else if messages_delivered == 3 {
+                       // nodes[0] still wants its commitment_signed
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (-1, 0), (0, 0), (0, 0), (0, 0), (false, false));
+               } else if messages_delivered == 4 {
+                       // nodes[1] still wants its final RAA
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (0, 0), (0, 0), (0, 0), (false, true));
+               } else if messages_delivered == 5 {
+                       // Everything was delivered...
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+               }
+
+               let events_1 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_1.len(), 1);
+               match events_1[0] {
+                       Event::PendingHTLCsForwardable { .. } => { },
+                       _ => panic!("Unexpected event"),
+               };
+
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+               reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+
+               nodes[1].node.channel_state.lock().unwrap().next_forward = Instant::now();
+               nodes[1].node.process_pending_htlc_forwards();
+
+               let events_2 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_2.len(), 1);
+               match events_2[0] {
+                       Event::PaymentReceived { ref payment_hash, amt } => {
+                               assert_eq!(payment_hash_1, *payment_hash);
+                               assert_eq!(amt, 1000000);
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               nodes[1].node.claim_funds(payment_preimage_1);
+               check_added_monitors!(nodes[1], 1);
+
+               let events_3 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_3.len(), 1);
+               let (update_fulfill_htlc, commitment_signed) = match events_3[0] {
+                       Event::UpdateHTLCs { ref node_id, ref updates } => {
+                               assert_eq!(*node_id, nodes[0].node.get_our_node_id());
+                               assert!(updates.update_add_htlcs.is_empty());
+                               assert!(updates.update_fail_htlcs.is_empty());
+                               assert_eq!(updates.update_fulfill_htlcs.len(), 1);
+                               assert!(updates.update_fail_malformed_htlcs.is_empty());
+                               assert!(updates.update_fee.is_none());
+                               (updates.update_fulfill_htlcs[0].clone(), updates.commitment_signed.clone())
+                       },
+                       _ => panic!("Unexpected event"),
+               };
+
+               if messages_delivered >= 1 {
+                       nodes[0].node.handle_update_fulfill_htlc(&nodes[1].node.get_our_node_id(), &update_fulfill_htlc).unwrap();
+
+                       let events_4 = nodes[0].node.get_and_clear_pending_events();
+                       assert_eq!(events_4.len(), 1);
+                       match events_4[0] {
+                               Event::PaymentSent { ref payment_preimage } => {
+                                       assert_eq!(payment_preimage_1, *payment_preimage);
+                               },
+                               _ => panic!("Unexpected event"),
+                       }
+
+                       if messages_delivered >= 2 {
+                               let (as_revoke_and_ack, as_commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &commitment_signed).unwrap();
+                               check_added_monitors!(nodes[0], 1);
+
+                               if messages_delivered >= 3 {
+                                       assert!(nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &as_revoke_and_ack).unwrap().is_none());
+                                       check_added_monitors!(nodes[1], 1);
+
+                                       if messages_delivered >= 4 {
+                                               let (bs_revoke_and_ack, bs_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &as_commitment_signed.unwrap()).unwrap();
+                                               assert!(bs_commitment_signed.is_none());
+                                               check_added_monitors!(nodes[1], 1);
+
+                                               if messages_delivered >= 5 {
+                                                       assert!(nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_revoke_and_ack).unwrap().is_none());
+                                                       check_added_monitors!(nodes[0], 1);
+                                               }
+                                       }
+                               }
+                       }
+               }
+
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+               if messages_delivered < 2 {
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (1, 0), (0, 0), (0, 0), (false, false));
+                       //TODO: Deduplicate PaymentSent events, then enable this if:
+                       //if messages_delivered < 1 {
+                               let events_4 = nodes[0].node.get_and_clear_pending_events();
+                               assert_eq!(events_4.len(), 1);
+                               match events_4[0] {
+                                       Event::PaymentSent { ref payment_preimage } => {
+                                               assert_eq!(payment_preimage_1, *payment_preimage);
+                                       },
+                                       _ => panic!("Unexpected event"),
+                               }
+                       //}
+               } else if messages_delivered == 2 {
+                       // nodes[0] still wants its RAA + commitment_signed
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (0, -1), (0, 0), (0, 0), (0, 0), (false, true));
+               } else if messages_delivered == 3 {
+                       // nodes[0] still wants its commitment_signed
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (0, -1), (0, 0), (0, 0), (0, 0), (false, false));
+               } else if messages_delivered == 4 {
+                       // nodes[1] still wants its final RAA
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (0, 0), (0, 0), (0, 0), (true, false));
+               } else if messages_delivered == 5 {
+                       // Everything was delivered...
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+               }
+
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+               reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+
+               // Channel should still work fine...
+               let payment_preimage_2 = send_along_route(&nodes[0], route, &[&nodes[1]], 1000000).0;
+               claim_payment(&nodes[0], &[&nodes[1]], payment_preimage_2);
+       }
+
+       #[test]
+       fn test_drop_messages_peer_disconnect_a() {
+               do_test_drop_messages_peer_disconnect(0);
+               do_test_drop_messages_peer_disconnect(1);
+               do_test_drop_messages_peer_disconnect(2);
+       }
+
+       #[test]
+       fn test_drop_messages_peer_disconnect_b() {
+               do_test_drop_messages_peer_disconnect(3);
+               do_test_drop_messages_peer_disconnect(4);
+               do_test_drop_messages_peer_disconnect(5);
+       }
+
+       #[test]
+       fn test_funding_peer_disconnect() {
+               // Test that we can lock in our funding tx while disconnected
+               let nodes = create_network(2);
+               let tx = create_chan_between_nodes_with_value_init(&nodes[0], &nodes[1], 100000, 10001);
+
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+
+               confirm_transaction(&nodes[0].chain_monitor, &tx, tx.version);
+               let events_1 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_1.len(), 1);
+               match events_1[0] {
+                       Event::SendFundingLocked { ref node_id, msg: _, ref announcement_sigs } => {
+                               assert_eq!(*node_id, nodes[1].node.get_our_node_id());
+                               assert!(announcement_sigs.is_none());
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               confirm_transaction(&nodes[1].chain_monitor, &tx, tx.version);
+               let events_2 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_2.len(), 1);
+               match events_2[0] {
+                       Event::SendFundingLocked { ref node_id, msg: _, ref announcement_sigs } => {
+                               assert_eq!(*node_id, nodes[0].node.get_our_node_id());
+                               assert!(announcement_sigs.is_none());
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               reconnect_nodes(&nodes[0], &nodes[1], true, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+               reconnect_nodes(&nodes[0], &nodes[1], true, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+
+               // TODO: We shouldn't need to manually pass list_usable_chanels here once we support
+               // rebroadcasting announcement_signatures upon reconnect.
+
+               let route = nodes[0].router.get_route(&nodes[1].node.get_our_node_id(), Some(&nodes[0].node.list_usable_channels()), &Vec::new(), 1000000, TEST_FINAL_CLTV).unwrap();
+               let (payment_preimage, _) = send_along_route(&nodes[0], route, &[&nodes[1]], 1000000);
+               claim_payment(&nodes[0], &[&nodes[1]], payment_preimage);
+       }
+
+       #[test]
+       fn test_drop_messages_peer_disconnect_dual_htlc() {
+               // Test that we can handle reconnecting when both sides of a channel have pending
+               // commitment_updates when we disconnect.
+               let mut nodes = create_network(2);
+               create_announced_chan_between_nodes(&nodes, 0, 1);
+
+               let (payment_preimage_1, _) = route_payment(&nodes[0], &[&nodes[1]], 1000000);
+
+               // Now try to send a second payment which will fail to send
+               let route = nodes[0].router.get_route(&nodes[1].node.get_our_node_id(), None, &Vec::new(), 1000000, TEST_FINAL_CLTV).unwrap();
+               let (payment_preimage_2, payment_hash_2) = get_payment_preimage_hash!(nodes[0]);
+
+               nodes[0].node.send_payment(route.clone(), payment_hash_2).unwrap();
+               check_added_monitors!(nodes[0], 1);
+
+               let events_1 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_1.len(), 1);
+               match events_1[0] {
+                       Event::UpdateHTLCs { .. } => {},
+                       _ => panic!("Unexpected event"),
+               }
+
+               assert!(nodes[1].node.claim_funds(payment_preimage_1));
+               check_added_monitors!(nodes[1], 1);
+
+               let events_2 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_2.len(), 1);
+               match events_2[0] {
+                       Event::UpdateHTLCs { ref node_id, updates: msgs::CommitmentUpdate { ref update_add_htlcs, ref update_fulfill_htlcs, ref update_fail_htlcs, ref update_fail_malformed_htlcs, ref update_fee, ref commitment_signed } } => {
+                               assert_eq!(*node_id, nodes[0].node.get_our_node_id());
+                               assert!(update_add_htlcs.is_empty());
+                               assert_eq!(update_fulfill_htlcs.len(), 1);
+                               assert!(update_fail_htlcs.is_empty());
+                               assert!(update_fail_malformed_htlcs.is_empty());
+                               assert!(update_fee.is_none());
+
+                               nodes[0].node.handle_update_fulfill_htlc(&nodes[1].node.get_our_node_id(), &update_fulfill_htlcs[0]).unwrap();
+                               let events_3 = nodes[0].node.get_and_clear_pending_events();
+                               assert_eq!(events_3.len(), 1);
+                               match events_3[0] {
+                                       Event::PaymentSent { ref payment_preimage } => {
+                                               assert_eq!(*payment_preimage, payment_preimage_1);
+                                       },
+                                       _ => panic!("Unexpected event"),
+                               }
+
+                               let (_, commitment_update) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), commitment_signed).unwrap();
+                               assert!(commitment_update.is_none());
+                               check_added_monitors!(nodes[0], 1);
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+               nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+
+               let reestablish_1 = nodes[0].node.peer_connected(&nodes[1].node.get_our_node_id());
+               assert_eq!(reestablish_1.len(), 1);
+               let reestablish_2 = nodes[1].node.peer_connected(&nodes[0].node.get_our_node_id());
+               assert_eq!(reestablish_2.len(), 1);
+
+               let as_resp = nodes[0].node.handle_channel_reestablish(&nodes[1].node.get_our_node_id(), &reestablish_2[0]).unwrap();
+               let bs_resp = nodes[1].node.handle_channel_reestablish(&nodes[0].node.get_our_node_id(), &reestablish_1[0]).unwrap();
+
+               assert!(as_resp.0.is_none());
+               assert!(bs_resp.0.is_none());
+
+               assert!(bs_resp.1.is_none());
+               assert!(bs_resp.2.is_none());
+
+               assert!(as_resp.3 == msgs::RAACommitmentOrder::CommitmentFirst);
+
+               assert_eq!(as_resp.2.as_ref().unwrap().update_add_htlcs.len(), 1);
+               assert!(as_resp.2.as_ref().unwrap().update_fulfill_htlcs.is_empty());
+               assert!(as_resp.2.as_ref().unwrap().update_fail_htlcs.is_empty());
+               assert!(as_resp.2.as_ref().unwrap().update_fail_malformed_htlcs.is_empty());
+               assert!(as_resp.2.as_ref().unwrap().update_fee.is_none());
+               nodes[1].node.handle_update_add_htlc(&nodes[0].node.get_our_node_id(), &as_resp.2.as_ref().unwrap().update_add_htlcs[0]).unwrap();
+               let (bs_revoke_and_ack, bs_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &as_resp.2.as_ref().unwrap().commitment_signed).unwrap();
+               assert!(bs_commitment_signed.is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               let bs_second_commitment_signed = nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), as_resp.1.as_ref().unwrap()).unwrap().unwrap();
+               assert!(bs_second_commitment_signed.update_add_htlcs.is_empty());
+               assert!(bs_second_commitment_signed.update_fulfill_htlcs.is_empty());
+               assert!(bs_second_commitment_signed.update_fail_htlcs.is_empty());
+               assert!(bs_second_commitment_signed.update_fail_malformed_htlcs.is_empty());
+               assert!(bs_second_commitment_signed.update_fee.is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               let as_commitment_signed = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_revoke_and_ack).unwrap().unwrap();
+               assert!(as_commitment_signed.update_add_htlcs.is_empty());
+               assert!(as_commitment_signed.update_fulfill_htlcs.is_empty());
+               assert!(as_commitment_signed.update_fail_htlcs.is_empty());
+               assert!(as_commitment_signed.update_fail_malformed_htlcs.is_empty());
+               assert!(as_commitment_signed.update_fee.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               let (as_revoke_and_ack, as_second_commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &bs_second_commitment_signed.commitment_signed).unwrap();
+               assert!(as_second_commitment_signed.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               let (bs_second_revoke_and_ack, bs_third_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &as_commitment_signed.commitment_signed).unwrap();
+               assert!(bs_third_commitment_signed.is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               assert!(nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &as_revoke_and_ack).unwrap().is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               let events_4 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_4.len(), 1);
+               match events_4[0] {
+                       Event::PendingHTLCsForwardable { .. } => { },
+                       _ => panic!("Unexpected event"),
+               };
+
+               nodes[1].node.channel_state.lock().unwrap().next_forward = Instant::now();
+               nodes[1].node.process_pending_htlc_forwards();
+
+               let events_5 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_5.len(), 1);
+               match events_5[0] {
+                       Event::PaymentReceived { ref payment_hash, amt: _ } => {
+                               assert_eq!(payment_hash_2, *payment_hash);
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               assert!(nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_second_revoke_and_ack).unwrap().is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               claim_payment(&nodes[0], &[&nodes[1]], payment_preimage_2);
+       }
+
+       #[test]
+       fn test_simple_monitor_permanent_update_fail() {
+               // Test that we handle a simple permanent monitor update failure
+               let mut nodes = create_network(2);
+               create_announced_chan_between_nodes(&nodes, 0, 1);
+
+               let route = nodes[0].router.get_route(&nodes[1].node.get_our_node_id(), None, &Vec::new(), 1000000, TEST_FINAL_CLTV).unwrap();
+               let (_, payment_hash_1) = get_payment_preimage_hash!(nodes[0]);
+
+               *nodes[0].chan_monitor.update_ret.lock().unwrap() = Err(ChannelMonitorUpdateErr::PermanentFailure);
+               if let Err(APIError::MonitorUpdateFailed) = nodes[0].node.send_payment(route, payment_hash_1) {} else { panic!(); }
+               check_added_monitors!(nodes[0], 1);
+
+               let events_1 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_1.len(), 1);
+               match events_1[0] {
+                       Event::BroadcastChannelUpdate { .. } => {},
+                       _ => panic!("Unexpected event"),
+               };
+
+               // TODO: Once we hit the chain with the failure transaction we should check that we get a
+               // PaymentFailed event
+
+               assert_eq!(nodes[0].node.list_channels().len(), 0);
+       }
+
+       fn do_test_simple_monitor_temporary_update_fail(disconnect: bool) {
+               // Test that we can recover from a simple temporary monitor update failure optionally with
+               // a disconnect in between
+               let mut nodes = create_network(2);
+               create_announced_chan_between_nodes(&nodes, 0, 1);
+
+               let route = nodes[0].router.get_route(&nodes[1].node.get_our_node_id(), None, &Vec::new(), 1000000, TEST_FINAL_CLTV).unwrap();
+               let (payment_preimage_1, payment_hash_1) = get_payment_preimage_hash!(nodes[0]);
+
+               *nodes[0].chan_monitor.update_ret.lock().unwrap() = Err(ChannelMonitorUpdateErr::TemporaryFailure);
+               if let Err(APIError::MonitorUpdateFailed) = nodes[0].node.send_payment(route.clone(), payment_hash_1) {} else { panic!(); }
+               check_added_monitors!(nodes[0], 1);
+
+               let events_1 = nodes[0].node.get_and_clear_pending_events();
+               assert!(events_1.is_empty());
+               assert_eq!(nodes[0].node.list_channels().len(), 1);
+
+               if disconnect {
+                       nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+                       nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+                       reconnect_nodes(&nodes[0], &nodes[1], true, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+               }
+
+               *nodes[0].chan_monitor.update_ret.lock().unwrap() = Ok(());
+               nodes[0].node.test_restore_channel_monitor();
+               check_added_monitors!(nodes[0], 1);
+
+               let mut events_2 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_2.len(), 1);
+               let payment_event = SendEvent::from_event(events_2.pop().unwrap());
+               assert_eq!(payment_event.node_id, nodes[1].node.get_our_node_id());
+               nodes[1].node.handle_update_add_htlc(&nodes[0].node.get_our_node_id(), &payment_event.msgs[0]).unwrap();
+               commitment_signed_dance!(nodes[1], nodes[0], payment_event.commitment_msg, false);
+
+               expect_pending_htlcs_forwardable!(nodes[1]);
+
+               let events_3 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_3.len(), 1);
+               match events_3[0] {
+                       Event::PaymentReceived { ref payment_hash, amt } => {
+                               assert_eq!(payment_hash_1, *payment_hash);
+                               assert_eq!(amt, 1000000);
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               claim_payment(&nodes[0], &[&nodes[1]], payment_preimage_1);
+
+               // Now set it to failed again...
+               let (_, payment_hash_2) = get_payment_preimage_hash!(nodes[0]);
+               *nodes[0].chan_monitor.update_ret.lock().unwrap() = Err(ChannelMonitorUpdateErr::TemporaryFailure);
+               if let Err(APIError::MonitorUpdateFailed) = nodes[0].node.send_payment(route, payment_hash_2) {} else { panic!(); }
+               check_added_monitors!(nodes[0], 1);
+
+               let events_4 = nodes[0].node.get_and_clear_pending_events();
+               assert!(events_4.is_empty());
+               assert_eq!(nodes[0].node.list_channels().len(), 1);
+
+               if disconnect {
+                       nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+                       nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+                       reconnect_nodes(&nodes[0], &nodes[1], false, (0, 0), (0, 0), (0, 0), (0, 0), (false, false));
+               }
+
+               // ...and make sure we can force-close a TemporaryFailure channel with a PermanentFailure
+               *nodes[0].chan_monitor.update_ret.lock().unwrap() = Err(ChannelMonitorUpdateErr::PermanentFailure);
+               nodes[0].node.test_restore_channel_monitor();
+               check_added_monitors!(nodes[0], 1);
+
+               let events_5 = nodes[0].node.get_and_clear_pending_events();
+               assert_eq!(events_5.len(), 1);
+               match events_5[0] {
+                       Event::BroadcastChannelUpdate { .. } => {},
+                       _ => panic!("Unexpected event"),
+               }
+
+               // TODO: Once we hit the chain with the failure transaction we should check that we get a
+               // PaymentFailed event
+
+               assert_eq!(nodes[0].node.list_channels().len(), 0);
+       }
+
+       #[test]
+       fn test_simple_monitor_temporary_update_fail() {
+               do_test_simple_monitor_temporary_update_fail(false);
+               do_test_simple_monitor_temporary_update_fail(true);
+       }
+
+       fn do_test_monitor_temporary_update_fail(disconnect_count: usize) {
+               let disconnect_flags = 8 | 16;
+
+               // Test that we can recover from a temporary monitor update failure with some in-flight
+               // HTLCs going on at the same time potentially with some disconnection thrown in.
+               // * First we route a payment, then get a temporary monitor update failure when trying to
+               //   route a second payment. We then claim the first payment.
+               // * If disconnect_count is set, we will disconnect at this point (which is likely as
+               //   TemporaryFailure likely indicates net disconnect which resulted in failing to update
+               //   the ChannelMonitor on a watchtower).
+               // * If !(disconnect_count & 16) we deliver a update_fulfill_htlc/CS for the first payment
+               //   immediately, otherwise we wait sconnect and deliver them via the reconnect
+               //   channel_reestablish processing (ie disconnect_count & 16 makes no sense if
+               //   disconnect_count & !disconnect_flags is 0).
+               // * We then update the channel monitor, reconnecting if disconnect_count is set and walk
+               //   through message sending, potentially disconnect/reconnecting multiple times based on
+               //   disconnect_count, to get the update_fulfill_htlc through.
+               // * We then walk through more message exchanges to get the original update_add_htlc
+               //   through, swapping message ordering based on disconnect_count & 8 and optionally
+               //   disconnect/reconnecting based on disconnect_count.
+               let mut nodes = create_network(2);
+               create_announced_chan_between_nodes(&nodes, 0, 1);
+
+               let (payment_preimage_1, _) = route_payment(&nodes[0], &[&nodes[1]], 1000000);
+
+               // Now try to send a second payment which will fail to send
+               let route = nodes[0].router.get_route(&nodes[1].node.get_our_node_id(), None, &Vec::new(), 1000000, TEST_FINAL_CLTV).unwrap();
+               let (payment_preimage_2, payment_hash_2) = get_payment_preimage_hash!(nodes[0]);
+
+               *nodes[0].chan_monitor.update_ret.lock().unwrap() = Err(ChannelMonitorUpdateErr::TemporaryFailure);
+               if let Err(APIError::MonitorUpdateFailed) = nodes[0].node.send_payment(route.clone(), payment_hash_2) {} else { panic!(); }
+               check_added_monitors!(nodes[0], 1);
+
+               let events_1 = nodes[0].node.get_and_clear_pending_events();
+               assert!(events_1.is_empty());
+               assert_eq!(nodes[0].node.list_channels().len(), 1);
+
+               // Claim the previous payment, which will result in a update_fulfill_htlc/CS from nodes[1]
+               // but nodes[0] won't respond since it is frozen.
+               assert!(nodes[1].node.claim_funds(payment_preimage_1));
+               check_added_monitors!(nodes[1], 1);
+               let events_2 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_2.len(), 1);
+               let (bs_initial_fulfill, bs_initial_commitment_signed) = match events_2[0] {
+                       Event::UpdateHTLCs { ref node_id, updates: msgs::CommitmentUpdate { ref update_add_htlcs, ref update_fulfill_htlcs, ref update_fail_htlcs, ref update_fail_malformed_htlcs, ref update_fee, ref commitment_signed } } => {
+                               assert_eq!(*node_id, nodes[0].node.get_our_node_id());
+                               assert!(update_add_htlcs.is_empty());
+                               assert_eq!(update_fulfill_htlcs.len(), 1);
+                               assert!(update_fail_htlcs.is_empty());
+                               assert!(update_fail_malformed_htlcs.is_empty());
+                               assert!(update_fee.is_none());
+
+                               if (disconnect_count & 16) == 0 {
+                                       nodes[0].node.handle_update_fulfill_htlc(&nodes[1].node.get_our_node_id(), &update_fulfill_htlcs[0]).unwrap();
+                                       let events_3 = nodes[0].node.get_and_clear_pending_events();
+                                       assert_eq!(events_3.len(), 1);
+                                       match events_3[0] {
+                                               Event::PaymentSent { ref payment_preimage } => {
+                                                       assert_eq!(*payment_preimage, payment_preimage_1);
+                                               },
+                                               _ => panic!("Unexpected event"),
+                                       }
+
+                                       if let Err(msgs::HandleError{err, action: Some(msgs::ErrorAction::IgnoreError) }) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), commitment_signed) {
+                                               assert_eq!(err, "Previous monitor update failure prevented generation of RAA");
+                                       } else { panic!(); }
+                               }
+
+                               (update_fulfill_htlcs[0].clone(), commitment_signed.clone())
+                       },
+                       _ => panic!("Unexpected event"),
+               };
+
+               if disconnect_count & !disconnect_flags > 0 {
+                       nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+                       nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+               }
+
+               // Now fix monitor updating...
+               *nodes[0].chan_monitor.update_ret.lock().unwrap() = Ok(());
+               nodes[0].node.test_restore_channel_monitor();
+               check_added_monitors!(nodes[0], 1);
+
+               macro_rules! disconnect_reconnect_peers { () => { {
+                       nodes[0].node.peer_disconnected(&nodes[1].node.get_our_node_id(), false);
+                       nodes[1].node.peer_disconnected(&nodes[0].node.get_our_node_id(), false);
+
+                       let reestablish_1 = nodes[0].node.peer_connected(&nodes[1].node.get_our_node_id());
+                       assert_eq!(reestablish_1.len(), 1);
+                       let reestablish_2 = nodes[1].node.peer_connected(&nodes[0].node.get_our_node_id());
+                       assert_eq!(reestablish_2.len(), 1);
+
+                       let as_resp = nodes[0].node.handle_channel_reestablish(&nodes[1].node.get_our_node_id(), &reestablish_2[0]).unwrap();
+                       let bs_resp = nodes[1].node.handle_channel_reestablish(&nodes[0].node.get_our_node_id(), &reestablish_1[0]).unwrap();
+
+                       assert!(as_resp.0.is_none());
+                       assert!(bs_resp.0.is_none());
+
+                       (reestablish_1, reestablish_2, as_resp, bs_resp)
+               } } }
+
+               let (payment_event, initial_revoke_and_ack) = if disconnect_count & !disconnect_flags > 0 {
+                       let events_4 = nodes[0].node.get_and_clear_pending_events();
+                       assert!(events_4.is_empty());
+
+                       let reestablish_1 = nodes[0].node.peer_connected(&nodes[1].node.get_our_node_id());
+                       assert_eq!(reestablish_1.len(), 1);
+                       let reestablish_2 = nodes[1].node.peer_connected(&nodes[0].node.get_our_node_id());
+                       assert_eq!(reestablish_2.len(), 1);
+
+                       let mut as_resp = nodes[0].node.handle_channel_reestablish(&nodes[1].node.get_our_node_id(), &reestablish_2[0]).unwrap();
+                       check_added_monitors!(nodes[0], 0);
+                       let mut bs_resp = nodes[1].node.handle_channel_reestablish(&nodes[0].node.get_our_node_id(), &reestablish_1[0]).unwrap();
+                       check_added_monitors!(nodes[1], 0);
+
+                       assert!(as_resp.0.is_none());
+                       assert!(bs_resp.0.is_none());
+
+                       assert!(bs_resp.1.is_none());
+                       if (disconnect_count & 16) == 0 {
+                               assert!(bs_resp.2.is_none());
+
+                               assert!(as_resp.1.is_some());
+                               assert!(as_resp.2.is_some());
+                               assert!(as_resp.3 == msgs::RAACommitmentOrder::CommitmentFirst);
+                       } else {
+                               assert!(bs_resp.2.as_ref().unwrap().update_add_htlcs.is_empty());
+                               assert!(bs_resp.2.as_ref().unwrap().update_fail_htlcs.is_empty());
+                               assert!(bs_resp.2.as_ref().unwrap().update_fail_malformed_htlcs.is_empty());
+                               assert!(bs_resp.2.as_ref().unwrap().update_fee.is_none());
+                               assert!(bs_resp.2.as_ref().unwrap().update_fulfill_htlcs == vec![bs_initial_fulfill]);
+                               assert!(bs_resp.2.as_ref().unwrap().commitment_signed == bs_initial_commitment_signed);
+
+                               assert!(as_resp.1.is_none());
+
+                               nodes[0].node.handle_update_fulfill_htlc(&nodes[1].node.get_our_node_id(), &bs_resp.2.as_ref().unwrap().update_fulfill_htlcs[0]).unwrap();
+                               let events_3 = nodes[0].node.get_and_clear_pending_events();
+                               assert_eq!(events_3.len(), 1);
+                               match events_3[0] {
+                                       Event::PaymentSent { ref payment_preimage } => {
+                                               assert_eq!(*payment_preimage, payment_preimage_1);
+                                       },
+                                       _ => panic!("Unexpected event"),
+                               }
+
+                               let (as_resp_raa, as_resp_cu) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &bs_resp.2.as_ref().unwrap().commitment_signed).unwrap();
+                               assert!(as_resp_cu.is_none());
+                               check_added_monitors!(nodes[0], 1);
+
+                               as_resp.1 = Some(as_resp_raa);
+                               bs_resp.2 = None;
+                       }
+
+                       if disconnect_count & !disconnect_flags > 1 {
+                               let (second_reestablish_1, second_reestablish_2, second_as_resp, second_bs_resp) = disconnect_reconnect_peers!();
+
+                               if (disconnect_count & 16) == 0 {
+                                       assert!(reestablish_1 == second_reestablish_1);
+                                       assert!(reestablish_2 == second_reestablish_2);
+                               }
+                               assert!(as_resp == second_as_resp);
+                               assert!(bs_resp == second_bs_resp);
+                       }
+
+                       (SendEvent::from_commitment_update(nodes[1].node.get_our_node_id(), as_resp.2.unwrap()), as_resp.1.unwrap())
+               } else {
+                       let mut events_4 = nodes[0].node.get_and_clear_pending_events();
+                       assert_eq!(events_4.len(), 2);
+                       (SendEvent::from_event(events_4.remove(0)), match events_4[0] {
+                               Event::SendRevokeAndACK { ref node_id, ref msg } => {
+                                       assert_eq!(*node_id, nodes[1].node.get_our_node_id());
+                                       msg.clone()
+                               },
+                               _ => panic!("Unexpected event"),
+                       })
+               };
+
+               assert_eq!(payment_event.node_id, nodes[1].node.get_our_node_id());
+
+               nodes[1].node.handle_update_add_htlc(&nodes[0].node.get_our_node_id(), &payment_event.msgs[0]).unwrap();
+               let (bs_revoke_and_ack, bs_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &payment_event.commitment_msg).unwrap();
+               assert!(bs_commitment_signed.is_none()); // nodes[1] is awaiting an RAA from nodes[0] still
+               check_added_monitors!(nodes[1], 1);
+
+               if disconnect_count & !disconnect_flags > 2 {
+                       let (_, _, as_resp, bs_resp) = disconnect_reconnect_peers!();
+
+                       assert!(as_resp.1.unwrap() == initial_revoke_and_ack);
+                       assert!(bs_resp.1.unwrap() == bs_revoke_and_ack);
+
+                       assert!(as_resp.2.is_none());
+                       assert!(bs_resp.2.is_none());
+               }
+
+               let as_commitment_update;
+               let bs_second_commitment_update;
+
+               macro_rules! handle_bs_raa { () => {
+                       as_commitment_update = nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_revoke_and_ack).unwrap().unwrap();
+                       assert!(as_commitment_update.update_add_htlcs.is_empty());
+                       assert!(as_commitment_update.update_fulfill_htlcs.is_empty());
+                       assert!(as_commitment_update.update_fail_htlcs.is_empty());
+                       assert!(as_commitment_update.update_fail_malformed_htlcs.is_empty());
+                       assert!(as_commitment_update.update_fee.is_none());
+                       check_added_monitors!(nodes[0], 1);
+               } }
+
+               macro_rules! handle_initial_raa { () => {
+                       bs_second_commitment_update = nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &initial_revoke_and_ack).unwrap().unwrap();
+                       assert!(bs_second_commitment_update.update_add_htlcs.is_empty());
+                       assert!(bs_second_commitment_update.update_fulfill_htlcs.is_empty());
+                       assert!(bs_second_commitment_update.update_fail_htlcs.is_empty());
+                       assert!(bs_second_commitment_update.update_fail_malformed_htlcs.is_empty());
+                       assert!(bs_second_commitment_update.update_fee.is_none());
+                       check_added_monitors!(nodes[1], 1);
+               } }
+
+               if (disconnect_count & 8) == 0 {
+                       handle_bs_raa!();
+
+                       if disconnect_count & !disconnect_flags > 3 {
+                               let (_, _, as_resp, bs_resp) = disconnect_reconnect_peers!();
+
+                               assert!(as_resp.1.unwrap() == initial_revoke_and_ack);
+                               assert!(bs_resp.1.is_none());
+
+                               assert!(as_resp.2.unwrap() == as_commitment_update);
+                               assert!(bs_resp.2.is_none());
+
+                               assert!(as_resp.3 == msgs::RAACommitmentOrder::RevokeAndACKFirst);
+                       }
+
+                       handle_initial_raa!();
+
+                       if disconnect_count & !disconnect_flags > 4 {
+                               let (_, _, as_resp, bs_resp) = disconnect_reconnect_peers!();
+
+                               assert!(as_resp.1.is_none());
+                               assert!(bs_resp.1.is_none());
+
+                               assert!(as_resp.2.unwrap() == as_commitment_update);
+                               assert!(bs_resp.2.unwrap() == bs_second_commitment_update);
+                       }
+               } else {
+                       handle_initial_raa!();
+
+                       if disconnect_count & !disconnect_flags > 3 {
+                               let (_, _, as_resp, bs_resp) = disconnect_reconnect_peers!();
+
+                               assert!(as_resp.1.is_none());
+                               assert!(bs_resp.1.unwrap() == bs_revoke_and_ack);
+
+                               assert!(as_resp.2.is_none());
+                               assert!(bs_resp.2.unwrap() == bs_second_commitment_update);
+
+                               assert!(bs_resp.3 == msgs::RAACommitmentOrder::RevokeAndACKFirst);
+                       }
+
+                       handle_bs_raa!();
+
+                       if disconnect_count & !disconnect_flags > 4 {
+                               let (_, _, as_resp, bs_resp) = disconnect_reconnect_peers!();
+
+                               assert!(as_resp.1.is_none());
+                               assert!(bs_resp.1.is_none());
+
+                               assert!(as_resp.2.unwrap() == as_commitment_update);
+                               assert!(bs_resp.2.unwrap() == bs_second_commitment_update);
+                       }
+               }
+
+               let (as_revoke_and_ack, as_commitment_signed) = nodes[0].node.handle_commitment_signed(&nodes[1].node.get_our_node_id(), &bs_second_commitment_update.commitment_signed).unwrap();
+               assert!(as_commitment_signed.is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               let (bs_second_revoke_and_ack, bs_third_commitment_signed) = nodes[1].node.handle_commitment_signed(&nodes[0].node.get_our_node_id(), &as_commitment_update.commitment_signed).unwrap();
+               assert!(bs_third_commitment_signed.is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               assert!(nodes[1].node.handle_revoke_and_ack(&nodes[0].node.get_our_node_id(), &as_revoke_and_ack).unwrap().is_none());
+               check_added_monitors!(nodes[1], 1);
+
+               assert!(nodes[0].node.handle_revoke_and_ack(&nodes[1].node.get_our_node_id(), &bs_second_revoke_and_ack).unwrap().is_none());
+               check_added_monitors!(nodes[0], 1);
+
+               expect_pending_htlcs_forwardable!(nodes[1]);
+
+               let events_5 = nodes[1].node.get_and_clear_pending_events();
+               assert_eq!(events_5.len(), 1);
+               match events_5[0] {
+                       Event::PaymentReceived { ref payment_hash, amt } => {
+                               assert_eq!(payment_hash_2, *payment_hash);
+                               assert_eq!(amt, 1000000);
+                       },
+                       _ => panic!("Unexpected event"),
+               }
+
+               claim_payment(&nodes[0], &[&nodes[1]], payment_preimage_2);
+       }
+
+       #[test]
+       fn test_monitor_temporary_update_fail_a() {
+               do_test_monitor_temporary_update_fail(0);
+               do_test_monitor_temporary_update_fail(1);
+               do_test_monitor_temporary_update_fail(2);
+               do_test_monitor_temporary_update_fail(3);
+               do_test_monitor_temporary_update_fail(4);
+               do_test_monitor_temporary_update_fail(5);
+       }
+
+       #[test]
+       fn test_monitor_temporary_update_fail_b() {
+               do_test_monitor_temporary_update_fail(2 | 8);
+               do_test_monitor_temporary_update_fail(3 | 8);
+               do_test_monitor_temporary_update_fail(4 | 8);
+               do_test_monitor_temporary_update_fail(5 | 8);
+       }
+
+       #[test]
+       fn test_monitor_temporary_update_fail_c() {
+               do_test_monitor_temporary_update_fail(1 | 16);
+               do_test_monitor_temporary_update_fail(2 | 16);
+               do_test_monitor_temporary_update_fail(3 | 16);
+               do_test_monitor_temporary_update_fail(2 | 8 | 16);
+               do_test_monitor_temporary_update_fail(3 | 8 | 16);
+       }
+
        #[test]
        fn test_invalid_channel_announcement() {
                //Test BOLT 7 channel_announcement msg requirement for final node, gather data to build customed channel_announcement msgs
@@ -3400,7 +6034,7 @@ mod tests {
                let as_chan = a_channel_lock.by_id.get(&chan_announcement.3).unwrap();
                let bs_chan = b_channel_lock.by_id.get(&chan_announcement.3).unwrap();
 
-               let _ = nodes[0].router.handle_htlc_fail_channel_update(&msgs::HTLCFailChannelUpdate::ChannelClosed { short_channel_id : as_chan.get_short_channel_id().unwrap() } );
+               let _ = nodes[0].router.handle_htlc_fail_channel_update(&msgs::HTLCFailChannelUpdate::ChannelClosed { short_channel_id : as_chan.get_short_channel_id().unwrap(), is_permanent: false } );
 
                let as_bitcoin_key = PublicKey::from_secret_key(&secp_ctx, &as_chan.get_local_keys().funding_key);
                let bs_bitcoin_key = PublicKey::from_secret_key(&secp_ctx, &bs_chan.get_local_keys().funding_key);
@@ -3447,7 +6081,7 @@ mod tests {
                let unsigned_msg = dummy_unsigned_msg!();
                sign_msg!(unsigned_msg);
                assert_eq!(nodes[0].router.handle_channel_announcement(&chan_announcement).unwrap(), true);
-               let _ = nodes[0].router.handle_htlc_fail_channel_update(&msgs::HTLCFailChannelUpdate::ChannelClosed { short_channel_id : as_chan.get_short_channel_id().unwrap() } );
+               let _ = nodes[0].router.handle_htlc_fail_channel_update(&msgs::HTLCFailChannelUpdate::ChannelClosed { short_channel_id : as_chan.get_short_channel_id().unwrap(), is_permanent: false } );
 
                // Configured with Network::Testnet
                let mut unsigned_msg = dummy_unsigned_msg!();