sftp subsystem dying

I tried to open a nautilus bookmark of a sftp session to my server today and it closed immediate with a "Could not open location 'sftp://vwelch@host' ssh program unexpectedly exited' message.

Running a sshd in debug mode on the server and I saw the following:

subsystem request for sftp
debug1: subsystem: exec() /usr/lib/openssh/sftp-server
debug1: Received SIGCHLD.

So for some reason my sftp-server subsyst is immediately failing. No idea why. Will update here when I figure it out.