I was doing a lot of upgrading, and eventually I ended up with a situation
where if I run emerge, I get

openpty failed: 'out of pty devices'

If I try to remote log in to my SSH server, it says "server refused to
allocate pty".

I upgraded to GCC 4.6.3 today and switched my profile over to it, while
most of my system has been build on GCC 4.4 - I'm not sure if that matters
here.  I'm currently on kernel 2.6.35-gentoo-r12, and I was making strides
to upgrade the system so I could migrate to udev-204 from udev-171-r6 which
I currently have.

When I upgraded to the 3.8.13 kernel today, I got the normal gdm login
interface I use, but when I tried to login - no dice!  SSH server refused
to allocate PTY, and I could not kill X in order to get into a terminal (at
least, it starts right back up).

So I figured maybe I made a mistake configuring the new kernel, so I
reverted back to my 2.6.35-gentoo-r12 kernel, and X of course wouldn't come
up because my nvidia modules have been re-made for the new kernel.  I was
able to log in to the system under the old kernel, but when I run any
emerge, it says "openpty failed: 'out of pty devices'".

So all of a sudden it doesn't seem to be connected to my upgrade to the new
kernel, as the old kernel does the same thing.

Where do I start looking for a problem?  I can follow instructions, but
beyond using emerge and updating the system, I don't know a whole lot about
inner workings.

I sure woud appreciate some help to get me out of this bind. :-(

Thank you,
Denis