If the load balancing is set to src-dst-ip, will a layer 2 switch forward based on that information? Particularly talking about a 6500, with trunk interfaces, since those packets never go to the layer 3 engine, will the load-balancing work as intended?
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Correct, it will load balance each source to a separate link. For example: If you have 2 PCs connected to tow different ports on 6500-A and the 6500-A has 2 uplinks to 2 different switches (6500-B and C) using an Etherchannael, on the output interface 6500-A you will see packet from one PC on one interfcae and the other PC on a different interface.