need help: erc emacs psybnc setup

[tipmaster]

I am trying to connect to psybnc from emacs erc.  For whatever reason,
it is going into infinite loop and complains wrong password.  It then
disconnects.  I am running emacs 21.4.1.  Is there a proper way to set
it up without getting wrong password error.  The password is right.  I
tried it on windows machine.

I start by doing the following:

1) erc-select,
2) then for server: ip_of_my_psybnc:port,
3) then nickname: my_psybnc_nick
4)  Password: my_psybnc_password

After this step, everything goes into infinite loop.  Anyone able to
get it to work.  What am I doing wrong? why am I getting password
wrong, even though password is right?

thanks.