Are you running SSL? If so, that's the reason the MD5 Challenge-Response was successfully connected.
The iOS 8 edit of all mobile device settings is part of Apples updated security settings. Unfortunately, they rarely tell users that their settings will be modified when they update and it's up to the users to figure it out.
Bruce Barnes
ChicagoNetTech Inc
brucecnt@comcast.net
Phonr: (773) 491-9019
Phone: (224) 444-0169
E-Mail and DNS Security Specialist
Network Security Specialist
Customer Service Portal: https://portal.chicagonettech.com
Website: https://www.ChicagoNetTech.com
Security Blog: http://networkbastion.blogspot.com/
Web and E-Mail Hosting, E-Mail Security and Consulting