- David Byron found and fixed a small bug with the --fail and authentication

stuff added a few weeks ago.  Turns out that if you specify --proxy-ntlm and
  communicate with a proxy that requires basic authentication, the proxy
  properly returns a 407, but the failure detection code doesn't realize it
  should give up, so curl returns with exit code 0. Test case 162 verifies
  this.

lib/transfer.c

@@ -1499,6 +1499,7 @@ CURLcode Curl_pretransfer(struct SessionHandle *data)
   /* set preferred authentication, default to basic */
 
   data->state.authstage = 0; /* initialize authentication later */
+  data->state.authproblem = FALSE;
 
   /* If there was a list of cookie files to read and we haven't done it before,
      do it now! */