Today I experienced a first in a technical interview. The candidate refused to use the whiteboard to solve an algorithm question, as I requested. There was no sort of disability at play or anything (outside of nervousness). He simply said that he is uncomfortable using a whiteboard for difficult questions.
Oddly enough, we were able to work through it with me standing over his shoulder looking at his notepad. He even communicated his thoughts effectively enough for me to help him over the inevitable bumps. After this I asked him how he felt about collaborative work (as collaboration here is heavy) and he said he loves it. I asked him if he likes to get together with other developers to hash over problems on the whiteboard to which he said yes.
Is this some sort of red flag or am I just reading too much into this? In our environment, collaboration is a must.
ADDITIONAL DETAIL:
The candidate was being evaluated for a lead development position, in which case he spends much of his time communicating with his developers and less time coding than an individual contributor.

I wouldn't be too concerned about it.  You aren't hiring him to work on a whiteboard; you're hiring him to work at a keyboard.  The whiteboard is an in-interview technique to help demonstrate his competence.  If that doesn't work well for him, but he's able to demonstrate his competence in other ways, then that's an irrelevant implementation detail.

From what you've written, he seems to be good at communicating and working through problems, and you noted that he was able to accomplish the required work on a notepad.  This solves the same problem as the whiteboard does: it gives the candidate somewhere to work through the process more slowly than typing, and without a Backspace key, while the interviewer watches to get a feel for their thought process.  From what's written here, I don't see any good reason not to hire him based on this.
