I saw in upgrading to 1.6 that REST was rebuilt to have internal auth checks. Before I would just do some work around logic in the router controller but from what I read you can set a method internally that should return a bool value? I can't get the response to here is a simplified example of a rest controller
Your warden() method should return: - true in case authentication succeeded - false in case authentication failed - a Reponse object if you want to return a custom response at failure
It was committed on July 7th 2013. Which means it was part of the 1.7 release, and 1.7.1. has it too. I double checked the code in the zip, and it does.
So there must have been something fishy about your install?