Do you have for nsswitch.conf a syntax similar to HP :

files [NOTFOUND=continue] LDAP ?

have you tried to connect yourself as localhost by telnet etc.. to see if all is working correctly ( corrupt /etc/passwd etc...) and checking agin if LDAP is called also?
Ive seen strnge issues when permission werent good on nsswitch.conf and resolv.conf (has to be read for all...)