(1) Ishmael was circumcised and yet OUT of covenant with G-d.
(2) Avraham was uncircumcised and yet IN covenant with G-d.
Misc. Note: Thought this was an interesting observation made by Gary Porton:
"...the Shammaites required the gentile to be circumcised for the expressed purpose of his conversion, and this position is supported by the discussion of the heave offering in the Palestinian Talmud. On the other hand, the Hillelites held that while converts, like all other Israelites, needed to be circumcised, they did not have to be circumcised upon their conversion. If they had been circumcised before they decided to convert, that circumcision was valid. From the Hillelites' point of view circumcision was not necessarily a part of the conversion ritual, it was merely the physical mark of the covenant between [Adonai] and the Israelites. For the Shammaites, on the other hand, circumcision was a ritual which had to be performed specifically for the purpose of joining the People Israel; therefore, a circumcised gentile had to undergo a symbolic circumcision at the time he became an Israelite. Thus, while both the Shammaites and the Hillelites require converts to be circumcised, they do so for different reasons because they seem to have different views concerning the significance of the act. For the Shammaites, circumcision appears to be an entrance requirement into the People Israel: Native-born Israelite babies and converts must be circumcised as a sign that they have entered the Israelite community. According to the Hillelites, males are circumcised as a sign that they belong to [Adonai's] people, so that gentiles do not need to undergo a symbolic circumcision if they were already circumcised at the time of their conversion," pg. 141 The Stranger Within Your Gates by Gary Porton