System is RedHat 6.2 Linux. Compiled from openssh-3.5p1.tar.gz sources. Access denied while trying to login using any valid username and password. The reason for access denial is that crypt() function in auth-passwd.c file returns incorrect encrypted password. crypt() returns a 13 character length encrypted string instead of about 30 charaters length encrypted password placed in /etc/shadow file. I solved this problem by editing Makefile file. Line "LIBS=-lutil -lz -lnsl -lcrypto -lcrypt" changed to "LIBS=-lcrypt -lutil -lz -lnsl -lcrypto" Recompiled once again and sshd began to work.
You should use --with-md5-passwords for older Redhat. Redhat 8.x and 9.x (maybe 7.x too) get this right without additional tricks.
Mass change of RESOLVED bugs to CLOSED