This is what I have done so far and I will say this procedure worked on Ubuntu 9.10 which perhaps had a different version of git.
server: mkdir ~/git
local:
Since you ran git init
on the server you created a working directoy but I think you wanted to make a bare repository instead.
Use a working directory when you want to add, edit and delete files in your project locally on your dev machine.
When you want to share your project, make a bare repository by git init --bare project.git
on the server then clone it to your machine and you will be able to push to it.
If you don't want to create a new one now then you can clone your project into a new bare repo by git clone --bare project new-bare-project.git