I\'m using cygwin on Windows 7 64 bit and I\'m trying to ssh -vvv localhost
ssh -vvv localhost
OpenSSH_6.1p1, OpenSSL 1.0.1c 10 May 2012 debug1: Reading configuration
As stated in comments, this error is OK.
Did you check /etc/hosts.deny? My guess is you have an sshd: x.x.x.x entry in there
sshd: x.x.x.x