I second this bug, I've debugged it further to additionally permissions on /var/log/btmp were wrong.
Had to change that in logrotate.conf and manually, but even with sshd -d desolation:~# /usr/sbin/sshd -d debug1: sshd version OpenSSH_4.1p1 Debian-4 debug1: read PEM private key done: type RSA debug1: private host key: #0 type 1 RSA debug1: read PEM private key done: type DSA debug1: private host key: #1 type 2 DSA debug1: rexec_argv[0]='/usr/sbin/sshd' debug1: rexec_argv[1]='-d' debug1: Bind to port 22 on 127.0.0.1. Server listening on 127.0.0.1 port 22. debug1: Server will not fork when running in debugging mode. debug1: rexec start in 4 out 4 newsock 4 pipe -1 sock 7 debug1: inetd sockets after dupping: 3, 3 Connection from 127.0.0.1 port 58459 debug1: Client protocol version 2.0; client software version OpenSSH_4.1p1 Debian-4 debug1: match: OpenSSH_4.1p1 Debian-4 pat OpenSSH* debug1: Enabling compatibility mode for protocol 2.0 debug1: Local version string SSH-2.0-OpenSSH_4.1p1 Debian-4 debug1: list_hostkey_types: ssh-rsa,ssh-dss debug1: SSH2_MSG_KEXINIT sent debug1: SSH2_MSG_KEXINIT received debug1: kex: client->server aes128-cbc hmac-md5 none debug1: kex: server->client aes128-cbc hmac-md5 none debug1: SSH2_MSG_KEX_DH_GEX_REQUEST received debug1: SSH2_MSG_KEX_DH_GEX_GROUP sent debug1: expecting SSH2_MSG_KEX_DH_GEX_INIT debug1: SSH2_MSG_KEX_DH_GEX_REPLY sent debug1: SSH2_MSG_NEWKEYS sent debug1: expecting SSH2_MSG_NEWKEYS debug1: SSH2_MSG_NEWKEYS received debug1: KEX done debug1: userauth-request for user damm service ssh-connection method nonedebug1: attempt 0 failures 0 Failed none for damm from 127.0.0.1 port 58459 ssh2 debug1: userauth-request for user damm service ssh-connection method publickey debug1: attempt 1 failures 1 Failed publickey for damm from 127.0.0.1 port 58459 ssh2 debug1: userauth-request for user damm service ssh-connection method keyboard-interactive debug1: attempt 2 failures 2 Failed keyboard-interactive for damm from 127.0.0.1 port 58459 ssh2 debug1: userauth-request for user damm service ssh-connection method password debug1: attempt 3 failures 3 Failed password for damm from 127.0.0.1 port 58459 ssh2 --- sshd_config attached
sshd_config
Description: Binary data