This looks like this is a problem that affects many but that there
doesn't appear to be any viable solution to. It seems as though the best
we can hope for is to configure sshd to look for the authorized_keys
outside the home directory while it is still unmounted, but all that
does is login to the machine but still leave the home directory
unmounted.

I think likely the only way to solve this was if upstream patched
ecryptfs to some how allow SSH key authentication. I don't know how
difficult that would be to do.

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https://bugs.launchpad.net/bugs/362427

Title:
  Public key ssh auth doesn't work with my Encrypted Home Directory

Status in eCryptfs:
  Invalid
Status in ecryptfs-utils package in Ubuntu:
  Invalid
Status in openssh package in Ubuntu:
  Invalid

Bug description:
  Spent all night to understand why public key ssh auth doesn't work. It
  seems to me that issue only affects Jaunty. Please have a look at the
  details below.

  So, the configuration is:

  1. Client
  - lsb_release: Ubuntu 8.10 intrepid
  - ssh-client: OpenSSH_5.1p1 Debian-3ubuntu1, OpenSSL 0.9.8g 19 Oct 2007

  2. Server A
  - lsb_release: Ubuntu 8.04.2 hardy
  - sshd: OpenSSH_4.7p1 Debian-8ubuntu1.2, OpenSSL 0.9.8g 19 Oct 2007

  3. Server B
  - lsb_release: Ubuntu 9.04 jaunty
  - sshd: OpenSSH_5.1p1 Debian-5ubuntu1, OpenSSL 0.9.8g 19 Oct 2007

  Server A and Server B have the same /etc/ssh/sshd_config:
  RSAAuthentication yes
  PubkeyAuthentication yes
  StrictModes no

  I turned StrictModes to "no", but every server has the same
  permissions on user's .ssh folder and .ssh/authorized_keys file.
  authorized_keys is the same on Server A and Server B.

  So, I am able to connect with public key from Client machine to Server
  A, but I can't connect to Server B.

  I run ssh client and sshd on Server B in debug mode, please find logs
  attached.

  Most important strings from auth.log:

  ...
  Apr 16 20:58:47 ubuntu sshd[21728]: debug3: mm_request_receive entering
  Apr 16 20:58:47 ubuntu sshd[21728]: debug3: monitor_read: checking request 21
  Apr 16 20:58:47 ubuntu sshd[21728]: debug3: mm_answer_keyallowed entering
  Apr 16 20:58:47 ubuntu sshd[21728]: debug3: mm_answer_keyallowed: 
key_from_blob: 0xb9084978
  Apr 16 20:58:47 ubuntu sshd[21728]: debug1: Checking blacklist file 
/usr/share/ssh/blacklist.DSA-1024
  Apr 16 20:58:47 ubuntu sshd[21728]: debug1: Checking blacklist file 
/etc/ssh/blacklist.DSA-1024
  Apr 16 20:58:47 ubuntu sshd[21728]: debug1: temporarily_use_uid: 1000/1000 
(e=0/0)
  Apr 16 20:58:47 ubuntu sshd[21728]: debug1: trying public key file 
/home/sasha/.ssh/authorized_keys
  Apr 16 20:58:47 ubuntu sshd[21728]: debug1: restore_uid: 0/0
  Apr 16 20:58:47 ubuntu sshd[21728]: debug1: temporarily_use_uid: 1000/1000 
(e=0/0)
  Apr 16 20:58:47 ubuntu sshd[21728]: debug1: trying public key file 
/home/sasha/.ssh/authorized_keys2
  Apr 16 20:58:47 ubuntu sshd[21728]: debug1: restore_uid: 0/0
  Apr 16 20:58:47 ubuntu sshd[21728]: Failed publickey for sasha from 10.0.0.11 
port 51194 ssh2
  Apr 16 20:58:47 ubuntu sshd[21728]: debug3: mm_answer_keyallowed: key 
0xb9084978 is not allowed
  ...

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