[exim] sasl2 CRAM-MD5 not happy

I have been unable to get CRAM-MD5 authentication via sasl2 on exim
4.60 working. PLAIN authentication works fine, but when attempting
CRAM-MD5, I get:

2005-12-04 19:07:16 sasl_cram_md5 authenticator failed for
adsl-66-122-112-170.dsl.snfc21.pacbell.net ([192.168.1.120])
[66.122.112.170]: 553 Initial data not expected

I am able, with the same email clients, to perform CRAM-MD5 with
imap, via cyrus-imapd, so I know my sasl2 installation itself is
capable of successful CRAM-MD5.

Does anyone have any ideas where to look for the culprit? Thanks!

--
Mark Edwards