CreateProcess CreatePipe - gather Stderr output not working

Im trying to create a process and send the output to a pipe which I
read after the
process runs so I can see whats wrong. In this case Im trying to call
it with pscp
(which is why I hardcoded the error Im looking for btw). Ive tried
googling this and
Ive seen many variations of this code, but so far I cant get it to
work the way I was
expecting it to.

In my debug output, ReadFile Avail <0> is as far as it gets and then
'hangs'.
I know its hanging because when I do it in the command line It also
hangs with the
string Im looking for, "Server refused our key", but I cant see why
the following code
isnt getting my Stderr output as I want. And yes, Im a newbie still.

Id appreciate any help on getting this to work and bulletproofing it
more also.
Thanks

bool doSystem(LPSTR cmd)
{
    HANDLE read_stderr, wr_stderr;

        STARTUPINFO si;
    ZeroMemory(&si, sizeof(si));
    si.cb = sizeof(si); // Must set the size of structure

    PROCESS_INFORMATION pi;
    SECURITY_ATTRIBUTES sa;
    sa.nLength = sizeof(SECURITY_ATTRIBUTES);
       sa.bInheritHandle = FALSE;
       sa.lpSecurityDescriptor = NULL;

       if (!CreatePipe(&read_stderr, &wr_stderr, &sa, 0)) //create
stderr pipe
       {
  dmsg(TERR, "CreatePipe %d", GetLastError());
                return false;
       }

      si.dwFlags = STARTF_USESTDHANDLES | STARTF_USESHOWWINDOW;
      si.wShowWindow = SW_HIDE;
      si.hStdError = wr_stderr;

    BOOL ret = CreateProcess(NULL, cmd, NULL, NULL, FALSE,
                            CREATE_NEW_CONSOLE, //CREATE_NO_WINDOW,
            NULL, NULL, &si, &pi);
    if (!ret)
    {
        dmsg(TERR, "CreateProcess FAILED");
                return false;
        }
    //WaitForSingleObject(pi.hProcess, INFINITE);

    dmsg(TINFO, "Process Started");

    char buf[MAX_BUF];
    DWORD bread, avail;

    if (!PeekNamedPipe(read_stderr, buf, MAX_BUF - 1, &bread, &avail,
NULL))
    {
        dmsg(TERR, "PeekNamedPipe stderr");
       }
    else
    {
        dmsg(TINFO, "ReadFile Avail <%d>", avail);
        ReadFile(read_stderr, buf, 1023, &bread, NULL);
        dmsg(TINFO, "bread <%d>", bread);
        dmsg(TINFO, "BUF: <%s>", buf);
        if (bread > 5)
        {
            if (!strcmp(buf, "Server refused our key"))
            {
                dmsg(TERR, "Server refused our key");
            }
        }
    }
        CloseHandle(wr_stderr);
    CloseHandle(pi.hProcess);

    return true;
}