Permissive licenses, community, and copyleft

Back in the late oughts a company I worked for wanted to use some AGPL'd software internally (gitorious?), and of course they wanted it to use the corporate single sign-on (F5 maybe?). No problem, a few days effort max. Then came weeks of email with expensive lawyers, and the eventual conclusion that it's probably impossible without AGPLing the entire SSO product. We thought of a number of workarounds (as I'm sure you can) but the language in the license is pretty flimsy... It seems like armchair lawyers have no problem staking their reputations on the AGPL, but reputable ones, who are fine with GPLv2, are just not happy to go there.

So, yes, I came out of that experience feeling like the AGPL is pretty darned toxic. I'd be curious to hear if anyone else has successfully navigated these waters.