Can't restart ssh after merging Usr/Grp files

[Andrew]

I'm migrating one of my older servers currently running 4.7-prerelease to a 
new box running 4.8-RC.

I backed up the master.password and group files.

I copied the master.password file over as master.password.new and the group 
file over as group.new
moved them both to /etc

then:
pwd_mkdb -p master.password.new
rm group
cp group.new group

I checked all of the users and groups and they appear to match up 
correctly. su to other users works fine, but when I tried to open up 
another ssh connection to this remote server, I'm getting a Connection 
Closed. I tried to restart sshd, but I got


Failed to start SSH server : Privilege separation user sshd does not exist

I still have a ssh session running as root.

Any help would be Much appreciated!
~Andrew