Unable to start service

I have just installed openSSH on a Win 2203 R2 Server. I followed the instriuctions from:
http://www.cs.bham.ac.uk/~smp/projects/ssh-windows/ The beginning also has the download link. I follwed the intructions very carefully and check all of my work twice. When I attempt to start the sevice I get the following in the event log:
The description for Event ID ( 0 ) in Source ( OpenSSHd ) cannot be found. The local computer may not have the necessary registry information or message DLL files to display messages from a remote computer. You may be able to use the /AUXSOURCE= flag to retrieve this description; see Help and Support for details. The following information is part of the event: OpenSSHd : PID 21992 : starting service `OpenSSHd' failed: execv: 1, Operation not permitted.

What am I missing? How do i resolve this?
pc_helperAsked:
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65tdRetiredCommented:
Go the top of OpenSSH folder, right select properites, select the security tab add the sshd user then select the advanced button, select the repace permissions check box.

Did you set a password on the sshd user?
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65tdRetiredCommented:
What account is the service running under?
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pc_helperAuthor Commented:
i am running it under sshd
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65tdRetiredCommented:
Is that a user (local or domain)?
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pc_helperAuthor Commented:
the user is a local user. The machine is is a donain contoller.
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pc_helperAuthor Commented:
I am thinking that this is a user account issue. I have tried using a domain account and i have tried setting the account as ./sshd instead of domain/sshd. What do you think the instuction mean when it says "Change the Log On tab of the OpenSSH service to use the server account? Do I choose ./sshd, domain/sshd or do i use local account? All three have failed.
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65tdRetiredCommented:
If the service is on a DC then it shouldn't matter as "." is the current server.
Have the rights for the user been reviewed (i.e. log on as a service).

Do you have a test box or a machine you could install Virtual PC /server nad try the install of the application again?
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pc_helperAuthor Commented:
Unfortunately I don't have a test machine thta I can try this on.
I have tried starting the service with the user account as:
.\sshd
domain\sshd
sshd@domain
All of these fail. The service seems to fail alternating between "Permission Denied" and "Operation not Permitted"

Here are the two outputs from the event log:

The description for Event ID ( 0 ) in Source ( OpenSSHd ) cannot be found. The local computer may not have the necessary registry information or message DLL files to display messages from a remote computer. You may be able to use the /AUXSOURCE= flag to retrieve this description; see Help and Support for details. The following information is part of the event: OpenSSHd : PID 23656 : starting service `I' failed: redirect_fd: open (1, /var/log/OpenSSHd.log): 13, Permission denied.

The description for Event ID ( 0 ) in Source ( OpenSSHd ) cannot be found. The local computer may not have the necessary registry information or message DLL files to display messages from a remote computer. You may be able to use the /AUXSOURCE= flag to retrieve this description; see Help and Support for details. The following information is part of the event: OpenSSHd : PID 23476 : starting service `OpenSSHd' failed: execv: 1, Operation not permitted.

I have also tried removing the sshd user account and recreating it. I also have added it to the "Server Operators group.
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65tdRetiredCommented:
How big is your workstation RAM and free disk space?
Virtual PC is no charge from MS as well as VMWare server, there are others, could build a virtual and test on the workstation.

Have you reviewed the OpenSSHd.log?
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pc_helperAuthor Commented:
I hadn't thought of the log. The log file has 3 entries. All are identical, they are:
/var/empty must be owned by root and not group or world-writable.

Is the Administrator Account the equivalent to root? How do i remove inherent permissions from the Administrators group or do I need to?
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pc_helperAuthor Commented:
SUCCESS!! The folder permissions fixed the problem. I can't login. I get the following messages:
Connection has unexpectedly closed. Server sent command exit status 1.
Cannot initialize SFTP protocol. Is the host running a SFTP server?

Can you help with this or should I open a new question?
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65tdRetiredCommented:
Don't know about the new question.

Have you reset the password for the sshd user?
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pc_helperAuthor Commented:
Shouldn't I be able to login with an account other than sshd? The /etc/passwd file has all of the domain users in it. I was trying to login with a domain account.
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