samba - Aug 2005 - SMB Users cannot change passwords - Please help..

Folks-

Having an issue w/ users changeing passwords on the SMB server. They can 
ssh/telnet in and run smbpasswd and get throug the chat. Once completed 
it fails for them and says

machine 127.0.0.1 rejected the (anonymous) password change: Error was : 
Wrong Password.
Failed to change password for xxxxxx

I check the log and I have this error going on when the do it.

NT password change supplied for user xxxxx, but we have no NT password 
to check it with
NT password change supplied for user xxxxx, but we have no NT password 
to check it with
NT password change supplied for user xxxxx, but we have no NT password 
to check it with

Here is a break down of my [global] settings

netbios name = WOOT
       socket options = TCP_NODELAY IPTOS_LOWDELAY SO_RCVBUF=8192 
SO_SNDBUF=8192
       server string = Samba 3.0 Test
       local master = yes
       interfaces = eri*, 127.0.0.1
       unix password sync = yes
       domain master = no
       passwd chat debug = true
       passwd program = /bin/passwd %u
       passwd chat = *old password* %o\n *new password* %n\n *changed*
       log file = /var/log/samba/log.%m
       max log size = 50
       lock directory = /var/lock/samba
       printcap name = /etc/printcap
       load printers = yes
       wins support = yes

-- 
Thank you
Todd