sshd does not work when shadow password is enabled

sshd does not work for me when shadow password is enabled.

1. I can telnet to my box as root (with shadow password enabled) ==>> username/password is valid.

2. If I disable shadow password, sshd works fine. I can login as root. ==>> the ssh keys are fine and sshd_config file is also good.

Any ideas?

I am using busybox login, shadow password. I have configured all internal APIs option in busybox.

My box runs the 2010621 tar file. I updated the ssh and busybox directories to the latest without any change in behavior. Looks like I am missing something obvious. Including a snippet of the failure from '/bin/sshd -Dde'.

I need to use shadow password for backward compatibility, so disabling shadow is not an option.

ebug1: kex: client->server aes128-ctr hmac-md5 none

debug1: kex: server->client aes128-ctr hmac-md5 none

debug1: SSH2_MSG_KEX_DH_GEX_REQUEST received

WARNING: /etc/config/moduli does not exist, using fixed modulus

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 root service ssh-connection method none

debug1: attempt 0 failures 0

Failed none for root from 169.254.1.11 port 58277 ssh2

debug1: userauth-request for user root service ssh-connection method keyboard-interactive

debug1: attempt 1 failures 0

debug1: keyboard-interactive devs

debug1: auth2_challenge: user=root devs=

debug1: kbdint_alloc: devices ''

debug1: userauth-request for user root service ssh-connection method password

debug1: attempt 2 failures 1

Failed password for root from 169.254.1.11 port 58277 ssh2