I found a similar user in an old thread who submitted a patch: (http://freeradius.1045715.n5.nabble.com/Capturing-ntlm-auth-failure- reasons-in-rlm-mschap-td2791760.html) And it appears that this patch made it into the rlm_mschap.c module code:
I submitted that patch and it was included in FR v1. Unfortunately, a change in v2 regressed this functionality. In v2, there's now an additional round trip, so the ntlm_auth results need to be saved - they are saved, in the current version, for success; but, not for failure. I submitted another patch for v2 last year that saves the ntlm_auth results for failures as well; but, it required rework (Alan wanted it split into two separate patches) and I haven't had a chance to rework it yet. Other, really nice mschap patches have been submitted since then (thank you Phil), so the rework, for me, is now a bit more.