Just for completeness, here's the only thing I'm seeing that could be indicative of issues:
[ 52.715964] Failure registering capabilities with primary security module.
- in the "dmesg" output.
I noticed as well that if I use the recovery kernel, I *can* login just fine without having to override anything. slapd is started. But, I'm not totally clear what the recovery kernel is setting up (yet), so suspect the LDAP authentications are not being used.
On a hunch, I checked if Open LDAP is starting when I use the normal kernel - nope. Well thar's the problem... now if I can just figure out why it starts with the recovery kernel, but not the normal kernel... sighs...
Found a thread on this - seems to be a bug with Ubuntu Gutsy: