I have the exact same problem... Since upgrading my server to Tiger ( now running 10.4.3 ) FTP hasn't worked at all. The service seems to run correctly, but I don't think it is taking log in credentials from the existing user list. I get incorrect user / password under any cred, even admin and root. I have created new passwords, reset old ones, deleted users, created new users, nothing. I think that the ftp conf file must be corrupt, but I'm not sure how you reinstall the FTP server on OS X Server.
Thanks in advance, martin jones