this seemed to be the solution for me; I was also having problems with not being able to login to a linux box, and sure enough, the upgrade solved it.

the other "solutions", it seems, are really only workarounds, anyway.

I had two OS X boxes that were compiled with 2.9p1. I then setup a new OS X machine and followed the same instructions on Stepwise. But they had changed. They had been updated to use 2.9p2 instead of 2.9p1. When I tried to connect to that machine, I would get the bad packet length error. I hadn't realized I had different versions until I read here that there was a p+1 update. I don't know what's different but there seems to be at least a problem with intermixing these two versions and connecting over ssh2. Connecting using ssh1 (ssh -1 host.domain.com) seems to work just fine. I've tried connecting from p1 to p2, no luck and p2 to p1, no luck.

Perhaps someone can fill everyone in to what has changed between p1 and p2 and connecting using ssh2.