@wnross:Ok, so we've got working accounts, lets go over pam and vsftpd
In vsftpd double check for
/etc/vsftpd/vsftpd.conf
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pam_service_name=vsftpd
In PAM make the following change
/etc/pam.d/vsftpd
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# auth required pam_listfile.so item=user sense=deny file=/etc/ftpusers$
auth required pam_listfile.so item=user sense=deny file=/etc/ftpusers$ onerr=succeed
@include common-account
@include common-session
@include common-auth
auth required pam_shells.so
Hang in there, we've almost got it
Cheers,
-Bill