OT: Authentication question...

OT: Authentication question...

[Ivan Gyurdiev]

This is off-topic, but since people on this list 
are so much better educated than myself on Linux issues,
I thought I could seek help.

My system will reject any attempt
to login as a user other than root:

[root@cobra root]# su phantom
could not open session
[root@cobra root]# su ftp
could not open session
[root@cobra root]# su lp
could not open session
[root@cobra root]# su root
[root@cobra root]# 

An strace showed the following notable difference between a working backup 
system and the broken one:

Broken:
setfsuid32(0x1f4)                       = 0                                     
setfsgid32(0x1f4)                       = 0
open("/etc/passwd", O_RDONLY)           = -1 EACCES (Permission denied)

Working:
setfsuid32(0x1f4)                       = 0
setfsgid32(0x1f4)                       = 0
open("/etc/passwd", O_RDONLY)           = 3

Which makes me very confused, since /etc/passwd is a world-readable file.
Any ideas what could be the problem?
 
Thank you for any help in advance...