[Dovecot] dovecot authentication problem on OSX

[Mac Shabba]

after reading good comments on dovecot i'm trying to get it going
I've got an apple g4, with osx 10.3.8

Compile and install went fine. I can also start dovecot, and telnet to
it...but I can't login
Even before I try to auth i get this in the log:
>>localhost dovecot: Dovecot starting up
>>localhost imap-login: opendir(".") failed when trying to get list of
authentication servers: Permission denied

I can't find any reference to this error message, and I'm completely
puzzled about it
I just need to know how to figure out what is causing this...is it
related to pam, folder permissions, server config, ....

MacShabba