[toaster] fresh install - can't get smtp auth to work

[Scott Ramshaw]

I am having what I assume is a weird issue, because it isn't working.  I 
have a fresh install on RHES 3 and vpopmail 5.4.0.  Followed the 
instructions for Bill's smtp-auth patch to netqmail 1.05.  Everything 
seems to be working, except for smtp-auth.

[EMAIL PROTECTED] root]# telnet localhost 25
Trying 127.0.0.1...
Connected to <hostname> (127.0.0.1).
Escape character is '^]'.
220 <hostname> ESMTP
ehlo
250-<hostname>
250-STARTTLS
250-PIPELINING
250-8BITMIME
250-SIZE 0
250 AUTH LOGIN PLAIN CRAM-MD5
AUTH LOGIN
503 auth not available (#5.3.3)
same result for plain and cram-md5
my qmail-smtpd run line is:
exec /usr/local/bin/softlimit -m 5000000 /usr/local/bin/tcpserver -v -R 
-l "$LOCAL" -x /etc/tcp.smtp.cdb -c "$MAXSMTPD" -u 91 -g 91 0 smtp 
/usr/local/bin/rblsmtpd /var/qmail/bin/qmail-smtpd 2>&1

91 is UID and GID of vpopmail.vchkpw, I also chowned certs to vpopmail. 
TLS seems to be working when tested with Netscape Mail.

I don't understand why it shows AUTH as available from EHLO, but AUTH is 
not available....  

Anyone ever see similar problem?  Or an idea as to if I somehow missed 
something? Or how I can debug further? strace on the process doesn't 
show anything significant.

Any help appreciated.
Thanks,
Scott R