This frustrating connection issue typically occurs when the SSH daemon (sshd) terminates the connection during the initial handshake phase. Let's analyze the debug output and explore solutions.

debug2: key_type_from_name: unknown key type '-----BEGIN'
debug2: key_type_from_name: unknown key type '-----END'

These lines suggest potential corruption in your SSH key files. However, the root cause often lies elsewhere since removing keys didn't help.

First, verify SSH service status:

sudo service ssh status
# or for newer systems:
sudo systemctl status sshd

Check critical SSH configuration files:

sudo nano /etc/ssh/sshd_config

Look for these common culprits:

MaxStartups 10:30:60
LoginGraceTime 2m
PermitRootLogin without-password

Examine the auth logs for clues:

sudo tail -f /var/log/auth.log
# Or on newer systems:
sudo journalctl -u ssh.service -f

Try these solutions in order:

1. Reset SSH Configuration

sudo mv /etc/ssh/sshd_config /etc/ssh/sshd_config.bak
sudo apt-get --purge autoremove openssh-server
sudo apt-get install openssh-server

2. Check for Resource Exhaustion

SSH might be failing due to system limits:

ulimit -a
sysctl net.ipv4.tcp_fin_timeout

3. Verify TCP Wrappers Configuration

Even empty files can cause issues:

sudo rm /etc/hosts.deny
sudo touch /etc/hosts.allow

Run sshd in debug mode on non-standard port:

sudo /usr/sbin/sshd -d -p 2222

Then connect with:

ssh -p 2222 user@host -vvv

Check for firewall rules or network issues:

sudo iptables -L -n -v
sudo netstat -tulnp | grep ssh

Create a startup check script:

#!/bin/bash
if ! pgrep -x "sshd" > /dev/null
then
    logger "SSH daemon not running - restarting"
    service ssh restart
fi

Add to cron with:

crontab -e
# Add:
* * * * * /path/to/script.sh

Remember to test each solution methodically before moving to the next one. The most effective approach is often a combination of these techniques.

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The ssh_exchange_identification: Connection closed by remote host error typically occurs when the SSH daemon terminates the connection before completing the protocol exchange. From the debug output, we can see the connection establishes successfully but fails during key exchange.

debug2: key_type_from_name: unknown key type '-----BEGIN'
debug2: key_type_from_name: unknown key type '-----END'

These messages suggest potential corruption in your SSH key files. First, verify your key file format:

cat ~/.ssh/id_rsa
-----BEGIN RSA PRIVATE KEY-----
MIIEpAIBAAKCAQEA3V8W...  # Should look like this
-----END RSA PRIVATE KEY-----

On your Ubuntu server, examine the SSH daemon logs:

sudo tail -f /var/log/auth.log
# Or for newer systems:
sudo journalctl -u ssh --no-pager -n 50

Common log patterns indicating issues:

sshd[1234]: error: Could not load host key: /etc/ssh/ssh_host_rsa_key
sshd[1234]: error: Could not load host key: /etc/ssh/ssh_host_ecdsa_key
sshd[1234]: fatal: No supported key exchange algorithms

SSH is extremely particular about file permissions. Check these critical permissions:

ls -la ~/.ssh/
# Should show:
-rw------- 1 user user  1675 May 10 09:00 id_rsa
-rw-r--r-- 1 user user   400 May 10 09:00 id_rsa.pub
-rw-r--r-- 1 user user   222 May 10 09:00 authorized_keys
drwx------ 2 user user  4096 May 10 09:00 .

To precisely identify where the connection fails:

ssh -vvv user@host 2> ssh_debug.log
# Then analyze the complete debug output

Common failure points in the handshake:

1. TCP connection established
2. SSH protocol version exchange
3. Key exchange initiation
4. Authentication phase

If you have physical access, regenerate host keys:

sudo rm /etc/ssh/ssh_host_*
sudo dpkg-reconfigure openssh-server

Check SSH daemon configuration for restrictions:

sudo grep -v '^#' /etc/ssh/sshd_config | grep -v '^$'
# Pay attention to:
# MaxStartups
# LoginGraceTime
# PermitRootLogin

If standard SSH fails, try these diagnostic connections:

ssh -o PreferredAuthentications=password -o PubkeyAuthentication=no user@host
ssh -o KexAlgorithms=diffie-hellman-group14-sha1 user@host

Verify network-level connectivity:

telnet host 22
# Should return SSH banner
# If connection drops immediately, check:
sudo iptables -L -n -v
sudo ufw status