ssh login lag

I've got a pretty bare bones system. Headless Fedora Core 5
My problem occurs when I login via putty through SSH,
after I've entered my password there is an ugly lag...

here here is my IPTABLES:

*filter
:OUTPUT ACCEPT [0:0]
:FORWARD ACCEPT [0:0]
:FIREWALL-INPUT - [0:0]
:INPUT ACCEPT [0:0]
-A INPUT -j FIREWALL-INPUT

-A FIREWALL-INPUT -p tcp --dport ssh -j ACCEPT
-A FIREWALL-INPUT -p tcp -m tcp -j REJECT
-A FIREWALL-INPUT -p udp -m udp -j REJECT
COMMIT

so, alright, pretty simple huh; anyone know why the lag monster appears?
ANY insight i think would help.
Thanks guys,
atomi.