Internal authentication failure after upgrade

Hello, I just updated my jabber server from Ubuntu 10.04 to 12.04 and therefore running ejabberd 2.1.10 on my updated machine. Unfortunately the authentication doesn't seem to work any more. I checked with existing users or even with newly created ones.

$ tail /var/log/ejabberd/ejabberd.log (I cleaned up ip and email addresses)

=INFO REPORT==== 2012-12-26 20:21:05 ===
I(<0.547.0>:ejabberd_listener:281) : (#Port<0.2051>) Accepted connection {{XXX,XXX,XXX,XXX},48408} -> {{XXX,XXX,XXX,XXX},5222}

=INFO REPORT==== 2012-12-26 20:21:07 ===
I(<0.585.0>:ejabberd_c2s:802) : ({socket_state,tls,{tlssock,#Port<0.2051>,#Port<0.2053>},<0.584.0>}) Failed authentication for yyy@xxx.zz

I put my ejabberd.cfg (cleaned up) on pastebin: http://pastebin.com/2jbgLPAU

This uses the standard (internal) authentication. From viewing at the log I don't know where to look further. Has any kind soul a suggestion for me? Thank you!