Thanks for the reply.
I'm running the same versions of the software you mention above (Net::SSH::Perl 1.23, cygwin 1.3.10, and openssh 3.1p1) except for openssh I think since you said "openssh 3.1.p1-1. Anyway, the fact that it works on your system seems to narrow it down to a configuration issue on my side, but it works perfectly from the command line so I'm not sure what to look for.