thanks for the reply Berhanie. For RHEL3 there is only 1 package "setup-2.5.x.x.x" so that was something I was going to try, till I found out an easier way from an obscure posting I came across.
Simply touching /var/log/lastlog was enough to get it to work again. Weird how it wouldn't create it itself, but anyway, there it is.
# touch /var/log/lastlog
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