Index: include/asterisk/jabber.h
===================================================================
--- include/asterisk/jabber.h	(revision 345544)
+++ include/asterisk/jabber.h	(working copy)
@@ -179,6 +179,8 @@
 	int timeout;
 	int message_timeout;
 	int authorized;
+	int authorization_failed;
+	int run;
 	int distribute_events;
 	int send_to_dialplan;
 	struct ast_flags flags;
Index: res/res_jabber.c
===================================================================
--- res/res_jabber.c	(revision 345544)
+++ res/res_jabber.c	(working copy)
@@ -1737,7 +1737,8 @@
 					}
 				}
 			} else if (!strcmp("failure", iks_name(node))) {
-				ast_log(LOG_ERROR, "JABBER: encryption failure. possible bad password.\n");
+				ast_log(LOG_ERROR, "JABBER: encryption failure. possible bad password. shutting down this client.\n");
+				client->authorization_failed = 1;
 			} else if (!strcmp("success", iks_name(node))) {
 				client->authorized = 1;
 				aji_send_header(client, client->jid->server);
@@ -2784,6 +2785,8 @@
 		sleep(4);
 	}
 
+	client->run = 1;
+	
 	do {
 		if (res == IKS_NET_RWERR || client->timeout == 0) {
 			while (res != IKS_OK) {
@@ -2794,10 +2797,15 @@
 		}
 
 		res = aji_recv(client, 1);
+		
+		if (client->authorization_failed) {
+			ast_debug(2, "Ending our Jabber client's thread due to authorization failure\n");
+			client->run = 0;
+		}
 
 		if (client->state == AJI_DISCONNECTING) {
 			ast_debug(2, "Ending our Jabber client's thread due to a disconnect\n");
-			pthread_exit(NULL);
+			client->run = 0;
 		}
 
 		/* Decrease timeout if no data received, and delete
@@ -2820,8 +2828,9 @@
 		} else if (res == IKS_NET_RWERR) {
 			ast_log(LOG_WARNING, "JABBER: socket read error\n");
 		}
-	} while (client);
+	} while (client->run);
 	ASTOBJ_UNREF(client, aji_client_destroy);
+	pthread_exit(NULL);
 	return 0;
 }