You're denying everyone and allowing no one. There's a good reason you can't connect ;). In /etc/hosts.allow, you could put:
ALL: LOCAL
However, you shouldn't be running sshd from inetd -- it's too slow. If
you aren't running ssh from inetd, then you're problem is elsewhere.
Maybe check /etc/ssh/*_config ?
--
MegaHAL quote:
I think a blowpipe is a marijuana cigarrette.
It'll get you deleted!
