ssh client can't connect 6.1 new install

[ke han]

Dear list,
I cannot connect from my OS X ssh client to a newly installed FreeBSD  
6.1 server.
It is odd that:
	1 - I can connect to other freeBSD 6.1 servers from this OS X client
	2 - I can connect to other Linux servers from this OS X client.
	3 - The server to which I cannot connect _can_ be connected to using  
PuTTY on Windows XP (running on Parallels VM on top the same OSX  
system!!!...meaning the ip and networking from the client are the  
same.).

I am using default password based authentication.  My OS X is at the  
latest upgrades from Apple.
A sample of trying to connect is as follows (personal identifiers  
changed):

 > ssh -v myuser at dev.mydomain.com
OpenSSH_4.2p1, OpenSSL 0.9.7i 14 Oct 2005
debug1: Reading configuration data /etc/ssh_config
debug1: Connecting to dev.mydomain.com [209.216.x.y] port 22.
debug1: Connection established.
debug1: identity file /Users/myuser/.ssh/identity type -1
debug1: identity file /Users/myuser/.ssh/id_rsa type -1
debug1: identity file /Users/myuser/.ssh/id_dsa type 2
debug1: Remote protocol version 2.0, remote software version  
OpenSSH_4.2p1 FreeBSD-20050903
debug1: match: OpenSSH_4.2p1 FreeBSD-20050903 pat OpenSSH*
debug1: Enabling compatibility mode for protocol 2.0
debug1: Local version string SSH-2.0-OpenSSH_4.2
debug1: Miscellaneous failure
No credentials cache found

debug1: Miscellaneous failure
No credentials cache found

debug1: SSH2_MSG_KEXINIT sent
debug1: SSH2_MSG_KEXINIT received
debug1: kex: server->client aes128-cbc hmac-md5 none
debug1: kex: client->server aes128-cbc hmac-md5 none
debug1: SSH2_MSG_KEX_DH_GEX_REQUEST(1024<1024<8192) sent
debug1: expecting SSH2_MSG_KEX_DH_GEX_GROUP
debug1: SSH2_MSG_KEX_DH_GEX_INIT sent
debug1: expecting SSH2_MSG_KEX_DH_GEX_REPLY
debug1: Host 'dev.mydomain.com' is known and matches the DSA host key.
debug1: Found key in /Users/myuser/.ssh/known_hosts:2
debug1: ssh_dss_verify: signature correct
debug1: SSH2_MSG_NEWKEYS sent
debug1: expecting SSH2_MSG_NEWKEYS
debug1: SSH2_MSG_NEWKEYS received
debug1: SSH2_MSG_SERVICE_REQUEST sent
Read from socket failed: Connection reset by peer

The only things changed in the server's default /etc/ssh/sshd_config  
are enabling root login and turning off dns lookups.  Both of these  
changes were rolled back to see if they caused the trouble.  This had  
no effect.
The connection gets closed (by the server it appears) every time.   
My /var/log/auth.log file does not log anything for this failure.   
Where else should I look??

thanks, ke han