After updating a SLES 10 SP4 system to SLES 11 SP1, I was not able to authenticate. It seems like the PAM modules are not able to read the hashed password in the /etc/shadow file. Booting to a rescue disk and chroot did allow a change of passwords.

This is ok for a few users, but it will cause havoc in a Production system.

Is there some change to the PAM modules? Any thoughts on why this is will be greatly appreciated.