One other quick item, in the /etc/ssh/sshd_config file check to see of the
following line is comment out or not:

AuthorizedKeyFile    %h/.ssh/authorized_keys  (default is commented out)

If it isn't commented out and you still can't access simple ssh then
comment it out and restart ssh.  Once you have simple known_host resolution
and want to reestablish keys than remove the # write and save the
sshd_config and restart ssh


-- 
James