esodan, clint, if it is the same problem, then no need to research it from the 
beginning.
Check out my post at 
http://www.held.org.il/blog/2011/05/the-myterious-case-of-broken-ssh-client-connection-reset-by-peer/
 , it tries to shed light on what's happening.

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https://bugs.launchpad.net/bugs/708493

Title:
  cannot login anymore: Read from socket failed: Connection reset by
  peer

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