Sendmail/SASL2/saslauthdb problem

[Rob Szarka]

I'm trying to configure sendmail to authenticate against the system 
password file for SMTP using the ports collection and having a heck 
of a time with it. saslauthdb works great when tested with 
testsaslauthd (testsaslauthd -s smtp  -u XXXXX -p XXXXX returns 
Success), but when testing by hand with the same account through 
sendmail (with the same bare username, no realm), I get the following error:

saslauthd[38367]: do_auth : auth failure: [user=XXXXXXX] 
[service=smtp] [realm=] [mech=pam] [reason=PAM auth error]

 From the other side, I see sendmail offering "250-AUTH PLAIN LOGIN" 
(what I want) in the ESTMP session and doing the auth login 
prompting, but then returning "535 5.7.0 authentication failed" in 
response to the base64-ed username and password.

Can anyone shed light on this? Here's my configuration:

FreeBSD 6.0-RELEASE #1

Sendmail 8.13.6/8.13.6 (installed via mail/sendmail-sasl compiled 
against an earlier install of security/cyrus-sasl2 -- I can see it 
passing the "-DSASL=2" during make)

/usr/local/lib/sasl2/Sendmail.conf has "pwcheck_method: saslauthd" 
and, I'm assuming from the error message, sendmail is actually calling it.