closing this ticket - since Zesty ran out of support on Jan the 13th:
https://www.google.de/url?https://lists.ubuntu.com/archives/ubuntu-announce/2018-January/000227.html
and kernel 4.10 is no longer supported.
Even on Xenial we moved the HWE kernel already from 4.10 to 4.13 

** Changed in: openssh (Ubuntu Zesty)
       Status: Confirmed => Invalid

** Changed in: ubuntu-z-systems
       Status: In Progress => Fix Released

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https://bugs.launchpad.net/bugs/1686618

Title:
  ssh connection attempts fail if hw crypto support on s390x is enabled
  on 17.04

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