Don’t ever set port authentication if you are doing AS2, for your love that is all holy.

Event Type: Error
Event Source: BizTalk Server 2006
Event Category: BizTalk Server 2006
Event ID: 5719
Date: 6/13/2009
Time: 12:54:19 AM
User: N/A
There was a failure executing the receive pipeline: “Microsoft.BizTalk.EdiInt.DefaultPipelines.AS2EdiReceive, Microsoft.BizTalk.Edi.EdiIntPipelines, Version=, Culture=neutral, PublicKeyToken=31bf3856ad364e35” Source: “Pipeline ” Receive Port: “AS2Receive” URI: “/BTSHTTPReceive.dll” Reason: The party corresponding to the inbound message cannot be identified.

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The fix is to set the receive port to No Authentication