I was thinking that was the issue you had because of the part that was talking about the login fail, but I see that you were more concerned with the prompt. I also did not get a prompt on this (and it did work on gdm), but it does do a push and aut...
Well, I did finally get it working…There were several issues but mainly from my installation. The auth.log was very helpful. My distro (Kubuntu) did not put the library where the example was. Also, the permissions were incorrect on pam_duo.conf. ...