[Xy-pic] dvips breaks \newgraphescape in graph feature

[Michael Abbott]

Compare

	\documentclass{article}
	\usepackage[dvips,graph]{xy}
	\newgraphescape{p}#1{}
	\begin{document}
	\end{document}

with the same with "dvips," deleted:

	\documentclass{article}
	\usepackage[graph]{xy}
	\newgraphescape{p}#1{}
	\begin{document}
	\end{document}

The first example produces the following cryptic error message:


...
(/usr/local/TeX/texmf/tex/generic/xypic/xyps-ps.tex
! Illegal parameter number in definition of \xyPSdictknown@.
<to be read again>
                   \DNii@
l.169  \DNii@
             {\xywarning@{You did not type Y or N -- try again please}%
?


while the second example is processed just fine.

Presumably the dvips feature is breaking the processing of arguments to
\newgraphescape?  Things *seem* to work ok if I don't try and use
arguments, though I haven't tried very much yet.

Is this a known problem?