I had this same problem, but I'm not using encrypted home directories. I did set my home directories permissions to 770 though. Moving the authorized keys to /etc/ssh/%u/authorized_keys worked.
Client: Ubuntu 9.04 Server: Ubuntu 9.04 -- Public key ssh auth doesn't work with my Encrypted Home Directory https://bugs.launchpad.net/bugs/362427 You received this bug notification because you are a member of Ubuntu Server Team, which is subscribed to openssh in ubuntu. -- Ubuntu-server-bugs mailing list Ubuntu-server-bugs@lists.ubuntu.com Modify settings or unsubscribe at: https://lists.ubuntu.com/mailman/listinfo/ubuntu-server-bugs
