Usually, this means that either the user name or password is wrong.
However, it looks like the version of Rebex SFTP you use is 1.5.2800.0 (or even older), which is more than 3 years old. Since then, several compatibility issues have been identified and fixed in the authentication code and error reporting was enhanced as well.
So if you are sure both the username and password are correct, please download the WinFormClient sample with current Rebex SFTP DLLs and give it a try. Does that make any difference?