telnetd sends DO AUTHENTICATION even when authentication is disabled.  With
HP-UX 11.0 telnet, this causes a deadlock condition, in which the server is
waiting for a WILL/WONT AUTHENTICATION, and the client... well I don't know
what the client is thinking.  Here's a trace for the interested.  The boxes
in question are tonga (HP-UX 11.0) and beastie (FreeBSD 4.0).

10:58:21.015413 tonga.49417 > beastie.telnet: S 2767829556:2767829556(0) win 32768 <mss 1460,wscale 0,nop> (ttl 64, id 38837)
10:58:21.015985 beastie.telnet > tonga.49417: S 3941562774:3941562774(0) ack 2767829557 win 17520 <mss 1460,nop,wscale 0> (DF) (ttl 64, id 2711)
10:58:21.026234 tonga.49417 > beastie.telnet: P 1:16(15) ack 1 win 32768 [telnet DO SUPPRESS GO AHEAD, WILL TERMINAL TYPE, WILL TSPEED, WILL LFLOW, WILL NAWS] (ttl 64, id 38838)
10:58:21.118078 beastie.telnet > tonga.49417: P 1:4(3) ack 16 win 17505 [telnet DO AUTHENTICATION] (DF) [tos 0x10]  (ttl 64, id 2715)
10:58:21.187846 tonga.49417 > beastie.telnet: . 16:16(0) ack 4 win 32768 (ttl 64, id 38839)
10:58:21.188154 beastie.telnet > tonga.49417: P 4:19(15) ack 16 win 17520 [telnet WILL SUPPRESS GO AHEAD, DO TERMINAL TYPE, DO TSPEED, DO LFLOW, DO NAWS] (DF) [tos 0x10]  (ttl 64, id 2718)
10:58:21.189491 tonga.49417 > beastie.telnet: P 16:25(9) ack 19 win 32768 [telnet SB NAWS IS 'P' SE] (ttl 64, id 38840)
10:58:21.280924 beastie.telnet > tonga.49417: . 19:19(0) ack 25 win 17520 (DF) [tos 0x10]  (ttl 64, id 2719)
=== wait for a while, then close telnet ===
10:58:28.942639 tonga.49417 > beastie.telnet: F 25:25(0) ack 19 win 32768 (ttl 64, id 38841)
10:58:28.942987 beastie.telnet > tonga.49417: . 19:19(0) ack 26 win 17520 (DF) [tos 0x10]  (ttl 64, id 2771)
10:58:28.946987 beastie.telnet > tonga.49417: F 19:19(0) ack 26 win 17520 (DF) [tos 0x10]  (ttl 64, id 2772)
10:58:28.948412 tonga.49417 > beastie.telnet: . 26:26(0) ack 20 win 32768 (ttl 64, id 38842)

Fix: For the problem of telnetd incorrectly sending DO AUTHENTICATE:
Apply the below patch to /usr/src/crypto/telnet/telnetd/telnetd.c

(The non-crypto telnetd has this code #ifdef'd out anyway.  The heimdal and
krb4 telnetd's are much different; I don't know if they suffer the same
symptoms.)

-----cut here-----


-----cut here-----

If you're having the problem with HP/BSD communication, apply the above patch
and disable authentication (described in How-To-Repeat, above).--FcZYVaCjKJ2hkaa3s7m0FjTuXaetZrQAEzi9UBz1ehgYkyNW
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--- telnetd.c.orig      Tue Jun 20 11:08:41 2000
+++ telnetd.c   Fri Jun  9 18:38:27 2000
@@ -643,11 +643,13 @@
     /*
      * Handle the Authentication option before we do anything else.
      */
-    send_do(TELOPT_AUTHENTICATION, 1);
-    while (his_will_wont_is_changing(TELOPT_AUTHENTICATION))
-       ttloop();
-    if (his_state_is_will(TELOPT_AUTHENTICATION)) {
-       retval = auth_wait(name);
+    if (auth_level >= 0) {
+       send_do(TELOPT_AUTHENTICATION, 1);
+       while (his_will_wont_is_changing(TELOPT_AUTHENTICATION))
+           ttloop();
+       if (his_state_is_will(TELOPT_AUTHENTICATION)) {
+           retval = auth_wait(name);
+       }
     }
 #endif
How-To-Repeat: 
Take a stock HP-UX 11.0 box and a FreeBSD 4.0 box with crypto installed.  Edit
inetd.conf and add "-a off" to the end, and SIGHUP inetd.  Start a tcpdump -v
if you like.  Telnet from the HP to the BSD box.  Watch a whole lot of nothing
happen.