I am trying to connection to a MySQL server on Host X through machine Y over SSH.
The same setup (but older version of MySQL workbench) works on my another box (CentOS 6
I've just come across this again recently. If you use a password protected private key and you just upgraded to macOS Sierra you probably need to re-add your private key to your keychain again.
ssh-add -K ~/.ssh/id_rsa
This instantly fixed the problem for me.