I had this same problem when I re-installed cygwin today. Took me a good hour to figure out what the hell was going on.

It seems that this version of sshd/openssh and its config script asks you if you want to run something called privilege separation. If you run the script like so:


"ssh-host-config -y"

you are saying, "Yes! Lets run in paranoid privilege separation mode!"

Instead just run this, thus avoiding saying "yes" to every question in the script:

"ssh-host-config"

And tell it NO when it asks about privilege separation.

I tried to get privsec working, and my machine already had an sshd user account, but no dice and I got sick of playing with it for maginal gains in an unlikely security scenario.

If you want you can read about privsec here:

http://www.citi.umich.edu/u/provos/ssh/privsep.html

but for us users who just need a simple sshd setup for a little remote access and some port forwarding it doesn't seem worth implementing.

--
Mike
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