[Samba] Problem adding new users after upgrade to 3.4.0

[Ben Sigman]

After upgrading to 3.4.0, I can no longer add new users. Any users that were added beforehand work fine. Any users that I attempt to create cannot login (error: NT_STATUS_LOGON_FAILURE). I was able to get one new user account to work (see below), but I cannot add any new users.

The server is Ubuntu 9.10 running Samba 3.4.0.

I am using:

security = user
pam password change = yes

Updating passwords for existing users using passwd successfully updates on smbpass (auth.log):

Jul 13 21:19:05 server passwd[3026]: pam_smbpass(passwd:chauthtok): password for (smbuser/1001) changed by (root/0)

...And authentication over smb works (auth.log):

Jul 13 21:42:53 server smbd[3684]: pam_unix(samba:session): session opened for user ben by (uid=0)

...In samba.log:

[2011/07/13 21:42:53,  4] auth/auth_sam.c:137(sam_account_ok)
  sam_account_ok: Checking SMB password for user smbuser
[2011/07/13 21:42:53,  5] auth/auth.c:297(check_ntlm_password)
  check_ntlm_password:  PAM Account for user [ben] succeeded

However, if I do:

smbpasswd -x user
Failed to find entry for user smbuser.

If I add a new user using:

useradd newuser
passwd newuser
smbpasswd -a newuser

This appears in auth.log:
Jul 13 21:20:07 server passwd[3033]: pam_smbpass(passwd:chauthtok): Failed to find entry for user newuser.

And if I attempt to authenticate (samba.log):

[2011/07/13 21:50:11,  3] auth/auth_sam.c:282(check_sam_security)
  check_sam_security: Couldn't find user 'newuser' in passdb.
[2011/07/13 21:50:11,  5] auth/auth.c:274(check_ntlm_password)
  check_ntlm_password: sam authentication for user [newuser] FAILED with error NT_STATUS_NO_SUCH_USER
[2011/07/13 21:50:11,  2] auth/auth.c:320(check_ntlm_password)
  check_ntlm_password:  Authentication for user [newuser] -> [newuser] FAILED with error NT_STATUS_NO_SUCH_USER

Now... Here's where it gets interesting. At this point, I converted my smbpasswd containing newuser to tdb...:
pdbedit -i smbpasswd -e tdbsam
...the account newuser now authenticate over SMB. However, adding any other new users is still not working.

I have attempted to repeat the steps described above for adding a user and then converting smbpasswd to tdb again, but to no avail. 

I have not defined passdb backend in smb.conf.

Anyone know what could be causing this?