Public bug reported:

If you regenerate the broken host key on the server, ltsp will hang without so 
much as a log message in the "verifying password" stage.
You have to do a

sudo /usr/sbin/ltsp-update-sshkeys
sudo /usr/sbin/ltsp-update-image

so people can log in again.

** Affects: openssh (Ubuntu)
     Importance: Undecided
         Status: New

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Host key regeneration leaves ltsp out in the cold
https://bugs.launchpad.net/bugs/231003
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