Openstack dropping packets between VMs

Issue

We have a proxy VM that is configured to to perform a many-to-one NAT. The flow is client (VM) --> proxy (VM) --> server (outside openstack). A trace from the proxy VM shows the request from the server to the proxy and proxy to the server. The trace also shows the response from the server to the proxy and proxy to the server. However, the connection fails. A trace on the client confirms that the response (SYN ACK) is not received by the server even though the proxy shows the response was sent to the client. We do have port security enabled on the network between the client and proxy and the rules allow any to any. But there seems to be something dropping the response packet to the client.