ssh through proxy hanging on "Sent encrypted session key"

[http://dummy.us.eu.org/robert (robert)]

Sorry if this is a FAQ, but the mailing list archive
(http://www.cs.hut.fi/ssh/ssh-archive) seems to be empty.

I'm using the nifty ssh-proxy.c provided from way-back.  I've modified it to
be better, but now it just hangs in "Sent encrypted session key" if I do a
"ssh -v".  I've tried to run it 4 times and each failed the same way.  I don't
think it's the connection (I can telnet to the host fine).  Here's the
complete -v output:

% ssh -v c2.org
SSH Version 1.2.13 [sparc-sun-solaris2.5], protocol version 1.3.
Standard version.  Does not use RSAREF.
Applying options for *
ssh_connect: getuid 132 geteuid 132 anon 1
Remote protocol version 1.4, remote software version 1.2.16
Waiting for server public key.
Received server public key (768 bits) and host key (1024 bits).
Host 'c2.org' is known and matches the host key.
Initializing random; seed file /disks/lazarus/fi-dev/robertb/.ssh/random_seed
Encryption type: idea
Sent encrypted session key.

This is where it hangs.  My friend has tried it for a different host and
the protocol versions are identical, yet the same problem occurs.

Any help would be appreciated.