cyrus-sasl2 setup failing

[admin]

okay heres what I got:

FreeBSD 4.8 Stable
Sendmail 8.12.9-sasl2 (compiled from /usr/ports/mail/sendmail-sasl)
cyrus-sasl-2.1.13 (compiled from /usr/ports/security/cyrus-sasl2-saslauthd)


A client is still not able to authenticate via SASL - looks like is it not
happy but I am not sure how to fix it.  Anybody got a clue what I am doing
wrong here?


note: there is no 250-AUTH line 


--- shell output ----
typhoon# sendmail -d0.1 -bv root | grep SASL
                NAMED_BIND NETINET NETINET6 NETUNIX NEWDB NIS PIPELINING SASLv2
typhoon# telnet 127.0.0.1 25
Trying 127.0.0.1...
Connected to localhost.enabled.com.
Escape character is '^]'.
220 typhoon.enabled.com ESMTP Sendmail 8.12.9/8.12.9; Wed, 4 Jun 2003 19:20:33 -
0700 (PDT)
ehlo localhost
250-typhoon.enabled.com Hello localhost.enabled.com [127.0.0.1], pleased to meet
 you
250-ENHANCEDSTATUSCODES
250-PIPELINING
250-8BITMIME
250-SIZE
250-DSN
250-ETRN
250-STARTTLS
250-DELIVERBY
250 HELP
--- snip ------------


----- from .mc file ---
### password authentication for relaying only
define(`confAUTH_OPTIONS', `A p y')dnl
define(`confAUTH_MECHANISMS', `LOGIN PLAIN')dnl
TRUST_AUTH_MECH(`LOGIN PLAIN')dnl
----------------------------------

---- from /usr/local/lib/sasl2/Sendmail.conf -------------
typhoon# less /usr/local/lib/sasl2/Sendmail.conf
pwcheck_method: passwd
------------------------------------------------------

--- from the maillog sendmail startup ----
Jun  4 20:06:15 typhoon sm-mta[43601]: restarting /usr/local/sbin/sendmail due
to signal
Jun  4 20:06:15 typhoon sm-mta[78359]: starting daemon (8.12.9):
SMTP+queueing at 00:10:00
Jun  4 20:06:15 typhoon sm-mta[78359]: STARTTLS=server, init=1
Jun  4 20:06:15 typhoon sm-mta[78359]: started as: /usr/local/sbin/sendmail -L
sm-mta -bd -q10m
-------------------------

--- from the logs when some attempts to authenticate ----
Jun  4 20:09:46 typhoon sm-mta[78399]: STARTTLS=server,
relay=volcano.enabled.com [131.161.240.131], version=TLSv1/SSLv3, verify=NO,
cipher=RC4-MD5, bits=128/128
Jun  4 20:09:46 typhoon sm-mta[78399]: STARTTLS=server, cert-subject=,
cert-issuer=
Jun  4 20:09:46 typhoon sm-mta[78399]: AUTH: available mech=NTLM LOGIN PLAIN
OTP DIGEST-MD5 CRAM-MD5, allowed mech=LOGIN PLAIN
Jun  4 20:09:46 typhoon sm-mta[78399]: h5539jJQ078399: AUTH failure (LOGIN):
no mechanism available (-4) SASL(-4): no mechanism available: checkpass failed
Jun  4 20:09:46 typhoon sm-mta[78399]: h5539jJQ078399: volcano.enabled.com
[131.161.240.131] did not issue MAIL/EXPN/VRFY/ETRN during connection to MTA
-------------------------------------------------------



- Noah