Ok - so I got the first part of the problem fixed after running some straces and I apologize for not finding this earlier:
/var/qmail/supervise/qmail-pop3d/run was still looking at
/bin/checkpasswd. So that is now fixed and I have a new message:
error while loading shared libraries: libc.so.6: failed to map segment
from shared object: Cannot allocate memory
So... I figured that had to do with the softlimit in the run script so
I increased that and now everything is working.
I do appologize for the trouble.