Unable to SSH with shell into NAS: "error: openpty: Invalid argument"

I have a WD MyBook WorldEdition II (White Light) NAS here. This essentially is a ARM926EJ-S with two SATA drives attached. For quite some time, I was running Debian 6.0 Squeeze on it. Now I recently updated to Debian 7.0 Wheezy with a custom step in the upgrade process, which I describe next.

Unfortunately, the system has to run on kernel version 2.6.24. This is, because WD made some patches to the kernel and has not updated it for a while. I am (currently) not able to apply these patches to a newer kernel version. As a result, I was not able to update libc within apt-get dist-upgrade. The libc of Wheezy requires minimum kernel of 2.6.26. However, I cross-compiled the libc w.r.t. kernel 2.6.24. This was advertised at some forum and claimed to work. Eventually after manually upgrading libc, apt-get dist-upgrade successfully continued.

However, after rebooting I am unable to open a shell via SSH. Instead, I get the following error message:

PTY allocation request failed on channel 0
[...]
stdin: is not a tty

I can execute commands though.

After investigating a bit more, I found out, that /var/log/auth.log contains:

sshd[4161]: error: openpty: Invalid argument
sshd[4161]: error: session_pty_req: session 0 alloc failed

For openpty: Invalid argument I have found only minimal information, e.g. this forum post, where the user eventually re-installed the SSH server.

Some more information:

• mount shows, that /dev/pts is mounted.
• /dev/pts however is empty (which I think is normal, if no-one is logged in).
• Downgrading openssh-server to the squeeze version did not help.

So, right now I am at the end of my knowledge. It would be great to have a way to debug which Invalid argument is actually passed to openpty.