Mac OS X Lion Terminal SSH connection sharing error

You have ControlPersist enabled. My educated guess is that the following happens:

1. You have connection to example.com
2. Logout, but because ControlPersist is enabled, session is kept open for future connections.
3. Something goes wrong with your network connection, and thus, persistent connection breaks.
4. When you run ssh [email protected] again, it tries to reuse connection from step 2, and opens a new connection after timeout.

No separate option for this timeout is available, according to man ssh_config. To avoid this, don't use ControlPersist. Additionally, I highly recommend using public key login, if possible. You can still have passphrase for your public key, but public key effectively prevents brute-forcing your password over SSH connection.

Additionally, you should not store control files under /tmp. Those should/must be secured, and for that, for example ~/.ssh/master/ssh_mux_%h_%p_%r is way better location. Of course, if you're the only user of your laptop (?), that's not too big issue.