Capistrano SSH::AuthenticationFailed, not prompting for password

Figured it out! Apparently this issue was with net-ssh gem. I had version 2.8.0 installed recently with some updates to my development environment and was the cause.

I'm not sure why it was failing, but gem uninstall net-ssh -v 2.8.0< fixed it for me.

If anyone actually knows why this was an issue or how I can correct this issue with the newer version of net-ssh I'd be interested to hear it.

The answer may break your rails app due to gem dependancies.

The issue is with net-ssh as was correctly answered by Sparkmasterflex, however whilst this will get capistrano working ok it may break your rails app:

These steps fixed both capistrano and rails for me ...

1. In your Gemfile add gem 'net-ssh', '2.7.0'
2. Run bundle update net-ssh
3. Run bundle (just to be sure everything is working ok'
4. Run gem uninstall net-ssh -v 2.8.0

If you are a rails user you should now be able to run both the rails server and capistrano.

I have a workaround that doesn't require downgrading net-ssh, per a comment at the link that Zach Lipton posted. Place this code in config/deploy.rb:

set :ssh_options, {
  config: false
  #Other options...
}

After I did that, I got another error, Error reading response length from authentication socket. Found the solution to that here. Execute these commands at your Bash prompt:

$ eval $(ssh-agent)
$ ssh-add

Upgrading your net-ssh version to 2.8.1 will solve the problem. They released a version bump in 19th february 2014 that fix this and other problems.

1. Uninstall your current net-ssh gem (gem install net-ssh -v 'version')

2. Just paste this on your Gemfile:

   gem 'net-ssh', '~> 2.8.1', :git => "https://github.com/net-ssh/net-ssh"

3. Run bundle install