I may be missing something here but aren't you waiting for

/new password:
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and from what I can see from debug() you are getting

 Enter l+ogin(NIS+ ) password
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I don't think the condition

$telnet->waitfor('/new password: ?$/i') or report_error("ERROR", "No p
+assword prompt found, contact Information Technologies: ");
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Is being met...waitfor() is just sitting there waiting for that prompt to match and it isn't so you never get to

$telnet->print($new_password);
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Of course, I haven't tried it on a real machine but this looks to me to be the possible cause of your quandry.