If you think SELinux is causing the problem you see, check for audit entries in the logs. They are hard to miss:
Apr 22 02:36:50 nat1168 kernel: audit(1177205810.636:3): avc:  denied  { entrypo
int } for  pid

2441 comm="sshd" name="bash" dev=hda3 ino=82107 scontext=user_u:s ystem_r:hotplug_t:s0 tcontext=system_u:object_r:file_t:s0 tclass


If you have some, please do not disable SELinux but do throw it into 'permissive' mode so we can investigate further. This can be done with kernel boot argument (eg in lilo or grub): enforcing=0 or in RedHat (Fedora,CentOS) in /etc/sysconfig/selinux:

root@nat1168 ~# more /etc/sysconfig/selinux 
# This file controls the state of SELinux on the system.
# SELINUX= can take one of these three values:
#       enforcing - SELinux security policy is enforced.
#       permissive - SELinux prints warnings instead of enforcing.
#       disabled - SELinux is fully disabled.

enforcing # SELINUXTYPE

type of policy in use. Possible values are: # targeted - Only targeted network daemons are protected. # strict - Full SELinux protection. SELINUXTYPE=targeted

Or even with system-config-securitylevel-tui

Centos 5 image installs from atlantis

SELinux bits in the filesystem will be wrong. This breaks SSH -> bash login and gods know what else. Run fixfiles restore as root and reboot to fix.