Comment 1 for bug 596399

I see the same thing, but only under certain circumstances. Connecting to

Authenticating with a password works fine:

>>> transport = paramiko.Transport((host, port))
>>> transport.connect()
>>> transport.remote_version
'SSH-2.0-OpenSSH_4.3p2 Debian-5~bpo.1.netgear1'
>>> transport.auth_password(username=user, password=passwd)
[]
>>> sftp = transport.open_sftp_client()

Success. Working sftp client.

Authenticating with a public key fails:

>>> transport = paramiko.Transport((host, port))
>>> transport.connect()
>>> transport.auth_publickey(username=user, key=keys[0])
[]
>>> transport.authenticated
True
>>> sftp = transport.open_sftp_client()
Traceback (most recent call last):
  File "<interactive input>", line 1, in <module>
  File "C:\Python27\lib\site-packages\paramiko-1.7.4-py2.7.egg\paramiko\transport.py", line 809, in open_sftp_client
    return SFTPClient.from_transport(self)
  File "C:\Python27\lib\site-packages\paramiko-1.7.4-py2.7.egg\paramiko\sftp_client.py", line 105, in from_transport
    return cls(chan)
  File "C:\Python27\lib\site-packages\paramiko-1.7.4-py2.7.egg\paramiko\sftp_client.py", line 86, in __init__
    server_version = self._send_version()
  File "C:\Python27\lib\site-packages\paramiko-1.7.4-py2.7.egg\paramiko\sftp.py", line 108, in _send_version
    t, data = self._read_packet()
  File "C:\Python27\lib\site-packages\paramiko-1.7.4-py2.7.egg\paramiko\sftp.py", line 179, in _read_packet
    raise SFTPError('Garbage packet received')
SFTPError: Garbage packet received
>>>

This error is 100% reproducible on this system (every time I authenticate with password, creating an sftp client succeeds, and every time I authenticate with a public key, creating an sftp client fails). I can sftp successfully using public key authentication with other sftp clients, including Putty and Bitvise Tunnelier.