Thanks for all the help.  The "poll" did not work.  The frustrating thing is that I can get certain things to work (the connection is there, but the stuff I want to work times out).  All I'm trying to do is get/put a file on a server.  You may be right that it has something to do with their server (but why would the sftp work described below?).  Anyway, this is what I have.  You will notice that the last call (sftp) works ok, but the first two (get, channel) do not. 

********  CODE  ****************
use Net::SSH2;
use Net::SSH2::Channel;
use IO::Scalar;
use strict;

my $handle = IO::Scalar->new;;
my $ssh2 = &connect('ftp.xxxx.com','XXX','PASSWORD');

sub connect
{
        my $host = $_[0];
        my $user = $_[1];
        my $pw = $_[2];

        my $ssh2 = Net::SSH2->new();

        $ssh2->connect($host);

        if ($ssh2->auth_password($user, $pw))
        {
                print "\nIN SFTP\n";
                $ssh2->poll(0);

                $ssh2->scp_get('./test/out/aFile.txt', $handle);
                print "Error: ", $ssh2->error(), "\n";
                $handle->seek(0, 0);
                _read($handle);

                print "Reading channel\n";
                my $chan = $ssh2->channel;
                $chan->exec('cat ./test/out/aFile.txt') or die "NO Way\n";
                print "Error: ", $chan->error(), "\n";
                _read($chan);
                print "Reading channel\n";

                # (b) read a line at a time with SFTP
                my $sftp = $ssh2->sftp;
                my $file = $sftp->open('./test/out/aFile.txt') or die "No Way Again\n";
                print "Error: ", $sftp->error(), "\n";
                _read($file);
        }

        $ssh2->disconnect();

        return $ssh2;
}

sub _read
{
        my $handle = shift;
        while (my $line = <$handle>)
        {
                print "Getting a line\n";
                print $line;
        }
}


******************  RESULTS  *****************
IN SFTP
Error: -28LIBSSH2_ERROR_SCP_PROTOCOLTimed out waiting for SCP response
Reading channel
Error: -28LIBSSH2_ERROR_SCP_PROTOCOLTimed out waiting for SCP response
Reading channel
Error: 0SSH_FX_OK
Getting a line
aaaaaaaaaaaaaaaaaaaaaaaaa  (THIS IS THE CORRECT DATA IN THE FILE)

THANKS