cygwin 1.7 sshd - unable to login

[LogicDaemon]

Hi all.
I am trying to set up ssh server as service in standalone Windows
2003. Sorry if this already was questioned but I did not find anything
related in near maillist archive.

After ssh-host-config I'm getting sshd service, which does not accept
any logins (log "-d -d" attached, found nothing helpful there).
However if I run
   /usr/sbin/sshd
from cygwin shell, it starts and I am able to login with both
certificate and keyboard-interactive methods. If I change ssh service
login user to my login then I am able to login also. What may be
wrong?

problem 2: first trials to set up service leaded to starting two
cygrunsrv processes (parent and child) and one sshd. But now I get one
cygrunsrv process running and one sshd, parent of which does not
exist. To stop process, I have to manually kill sshd. I already
removed and reinstalled service and config file, but last behavior
persists.

--
 LogicDaemon
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