Please also see #16064, the sendmail side of the story. While building cyrus-sasl, CRAM-MD5 is explicitly disabled. Is there a specific reason for this? I was wondering because I saw the list of SMTP authentication methods different MUA's support, and DIGEST-MD5 was rare; on the other hand, CRAM-MD5 seemed to be much widely supported: http://www.sendmail.org/~ca/email/mel/SASL_ClientRef.html
Will be fixed in cyrus-sasl-1.5.24-4.