Jenkins Linux Slave error: SEVERE: I/O error in channel channel

We ran into this problem when updating to Jenkins 2.60.1. That version is the first LTS release to require Java 8 and we made sure to update the master to use Java 8. Unfortunately the slaves wouldn't start, giving the error you report in the title.

The problem turned out to be that the slave nodes were starting using Java 7 and we had to use the "Advanced" button on the node configuration page to make sure the correct Java path was used by the slave nodes