I had the same problem on my AIX box. I solved it by creating a symbolic
link in /usr/bin. Hope this works for you as well.
On Wed, 13 Dec 2000, Gene LeDuc wrote:
> When I try to open a sftp window from my terminal connection I get an
> error message that the server failed to start. The only non-standard
> thing is that the server is listening on port 8080 instead of 22. I can
> get secure terminal windows but I can get secure file transfer windows.
>
> Env: RedHat 7.0, ssh-2.3.0 client and server
>
> I also have a RedHat 5.2 server with the same version of ssh2 listening
> on port 8080 and I have no problems with the file transfer program from
> the same client.
>
> I've checked that sftp-server is in the path. I also put the full path
> to the file in sshd2_config.
>
> Any ideas where to check next?
>