I have been getting this same issue and it seems to happen under suns 1.3.1 JVM with JAAS in the extensions dir.
I am able to get this to run if I remove the JAAS extensions.
Interestingly enought this doesnt happen under a 1.4 JVM which has JAAS already included.
Actually got the Answer from Scott Stark on the Mailling list. Looks like JAAS 1.0 for 1.3.1 JVMs has a class loader error.
JBoss 3.0 includes a fixed JAAS version but the 1.3.1 extention was overriding it. The 1.4 JVM doesnt have this issue.