I have run into this with Macs before. Are you seeing PAM authentication errors in the system log on the Mac? You can fix this by editing the /etc/sshd_config file on the Mac and enabling the PasswordAuthentication option. Change it from this:
#PasswordAuthentication no
to this:
PasswordAuthentication yes
and restart the SSHD service:
sudo launchctl stop com.openssh.sshd