I had the same issue. I built OpenSSH from source and still had the problem. I installed the latest updates and the problem is gone. I don't know which of the updates fixed it - none of them seemed obviously related to ssh. Here are the versions of OpenSSH & the updates that "fixed" the issue:
$ ssh -v OpenSSH_5.0p1, OpenSSL 0.9.8g 19 Oct 2007 Commit Log for Mon Jun 9 08:25:35 2008 Upgraded the following packages: apache2 (2.2.8-1ubuntu0.1) to 2.2.8-1ubuntu0.2 apache2-mpm-prefork (2.2.8-1ubuntu0.1) to 2.2.8-1ubuntu0.2 apache2-utils (2.2.8-1ubuntu0.1) to 2.2.8-1ubuntu0.2 apache2.2-common (2.2.8-1ubuntu0.1) to 2.2.8-1ubuntu0.2 gnome-about (1:2.22.2-0ubuntu2) to 1:2.22.2-0ubuntu3 gnome-desktop-data (1:2.22.2-0ubuntu2) to 1:2.22.2-0ubuntu3 initramfs-tools (0.85eubuntu36) to 0.85eubuntu39.1 libgksu2-0 (2.0.5-1ubuntu5) to 2.0.5-1ubuntu5.1 libgnome-desktop-2 (1:2.22.2-0ubuntu2) to 1:2.22.2-0ubuntu3 libsmbclient (3.0.28a-1ubuntu4) to 3.0.28a-1ubuntu4.1 python-launchpad-bugs (0.2.30) to 0.2.30.1 samba-common (3.0.28a-1ubuntu4) to 3.0.28a-1ubuntu4.1 smbclient (3.0.28a-1ubuntu4) to 3.0.28a-1ubuntu4.1 tzdata (2008b-1ubuntu1) to 2008c-1ubuntu0.8.04 tzdata-java (2008b-1ubuntu1) to 2008c-1ubuntu0.8.04 ufw (0.16.2) to 0.16.2.1 virtualbox-ose-modules-generic (24.0.1) to 24.0.3 xserver-xorg-video-cirrus (1:1.1.0-8) to 1:1.1.0-8ubuntu1 Installed the following packages: virtualbox-ose-modules-2.6.24-18-generic (24.0.3) -- I cannot connect to any server. Conection hangs up at "channel 0: open confirm rwindow 0 rmax 32768" https://bugs.launchpad.net/bugs/237894 You received this bug notification because you are a member of Ubuntu Bugs, which is subscribed to Ubuntu. -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs