After much frustration I believe I have discovered how to make FreeNAS 9.3 and LDAP password authentication work. The issue appears to be LDAP server must have TLS support enabled.
Based on the directions on the Ubuntu 12.04 OpenLDAP Server guide I figured out how to enable TLS encryption. Jumping to the TLS section and following the directions I was able to successfully enable TLS on my LDAP server.
Ubuntu 12.04 OpenLDAP Server Guide:
https://help.ubuntu.com/12.04/serverguide/openldap-server.html
A word of caution, after you perform 'sudo apt-get install slapd ldap-utils' I ran 'sudo dpkg-reconfigure slapd' so I could easily change dc value from the default to dc=local.
DigitalOcean OpenLDAP install guide:
https://www.digitalocean.com/commun...ap-and-phpldapadmin-on-an-ubuntu-14-04-server
FreeNAS 9.3 LDAP configuration was super simple. Click on 'Advanced Mode' and fill out the following only:
Hostname: ldaplocal (your ldap hostname)
Base DN: dc=local
Bind DN: cd=admin,dc=local
Bind password: *******
User Suffix: ou=People ( match LDAP users ou )
Group Suffix: ou=Groups ( match LDAP groups ou )
Encryption Mode: off
Auxiliary Parameters: ldap_tls_reqcert = never
Enable: checked
Click save....
In FreeNAS shell running the commands 'getent passwd' and 'getent group' returned the values set in the LDAP server.
To prove the password authentication works I enabled ssh and sshed into FreeNAS using an LDAP username. The user was authenticated and the default directory was the specified home directory listed in the LDAP server, which in my case was created on first login. The uid and gid for files created during ssh session all have the correct values as well.
I hope this post helps others in the community solve their LDAP authentication issues since there seems to be no good documentation explaining that the LDAP server is the root cause of password failures and not FreeNAS.