[gentoo-user] openssh-7.1_p1-r2 won't allow "nxserver" to connect

I'm running: nxserver-freenx-0.7.3_p104-r7
After recent upgrade, system installed new stable openssh-7.1_p1-r2

The problem is the new openssh-7.1_p1-r2 will not allow my my "nxserver" to connect, I get an error:
Permission denied (publickey,keyboard-interactive) see below:
 
nxsetup --test
...
<---- done

----> Testing your nxserver connection ...
Permission denied (publickey,keyboard-interactive).
Fatal error: Could not connect to NX Server.

Please check your ssh setup:

The following are _examples_ of what you might need to check.

	- Make sure "nx" is one of the AllowUsers in sshd_config.
    (or that the line is outcommented/not there)
	- Make sure "nx" is one of the AllowGroups in sshd_config.
    (or that the line is outcommented/not there)
	- Make sure your sshd allows public key authentication.
	- Make sure your sshd is really running on port 22.
	- Make sure your sshd_config AuthorizedKeysFile in sshd_config is set to authorized_keys2.
    (this should be a filename not a pathname+filename)
  - Make sure you allow ssh on localhost, this could come from some
    restriction of:
      -the tcp wrapper. Then add in /etc/hosts.allow: ALL:localhost
      -the iptables. add to it:
         $ iptables -A INPUT  -i lo -j ACCEPT
         $ iptables -A OUTPUT -o lo -j ACCEPT

What I should be getting is this:
----> Testing your nxserver connection ...
HELLO NXSERVER - Version 3.2.0-74-TEAMBZR104 OS (GPL, using backend: 3.5.0)
NX> 105 quit
Quit
NX> 999 Bye
<--- done

I did not change anything in sshd_config.
But I downgraded to: openssh-6.9_p1-r2 and nxserver connects OK.

What could be the problem with new: openssh-7.1_p1-r2

-- 
Thelma