I am having difficulty installing SDM v2.5 on a 1841 router. I have connectivity to the router, I have a login with privilege level 15. I am able to telnet to and login to the router fine. However, when I run the SDM setup, it gives the error message that SDM was unable to connect to the router.
I sniffed the network and SDM does telnet to the router, login, and then goes into and exits config mode, and that is it.
I do not have SSH enabled, but I'm not aware that that is necessary to install SDM.
Try to move the files manually via TFTP to the router's flash. Full SDM requires following files:
Hope it helps...