"can't open pseudo-terminal" error with glibc 2.1 (potato)

[Carlos Carvalho <carlos@fisica.ufpr.br>]

I upgraded to the latest unstable, including glibc 2.1, and suddenly
windows ssh clients, and some unix ones too, started getting "the
server couldn't allocate a pseudo-terminal". What can I do? It's not a
problem of all pty's being used.

I tried to recompile sshd to no avail.

If I can't get this to work quickly I'll have to downgrade...