SSH in to GCE instance fail despite the right SSH configuration - ssh

Question

I am trying to SSH in to GCE instance with gcompute ssh. I seem to have done everything right so far but when I run 
gcloud compute ssh --zone "us-central1-b" --project "projectname" "instancename" --ssh-flag="-v"
I get
debug1: Reading configuration data /etc/ssh/ssh_config
debug1: /etc/ssh/ssh_config line 48: Applying options for *
debug1: Connecting to 104.XXX.XXX.XXX port 22.
debug1: Connection established.
debug1: identity file /Users/myusername/.ssh/google_compute_engine type 0
debug1: key_load_public: No such file or directory
debug1: identity file /Users/myusername/.ssh/google_compute_engine-cert type -1
debug1: Local version string SSH-2.0-OpenSSH_7.6
debug1: Remote protocol version 2.0, remote software version OpenSSH_5.3
debug1: match: OpenSSH_5.3 pat OpenSSH_5* compat 0x0c000000
debug1: Authenticating to 104.XXX.XXX.XXX:22 as 'myusername'
debug1: using hostkeyalias: compute.1694426511137997XXXX
debug1: SSH2_MSG_KEXINIT sent
debug1: SSH2_MSG_KEXINIT received
debug1: kex: algorithm: diffie-hellman-group-exchange-sha256
debug1: kex: host key algorithm: ssh-rsa
debug1: kex: server->client cipher: aes128-ctr MAC: umac-64#openssh.com
compression: none
debug1: kex: client->server cipher: aes128-ctr MAC: umac-64#openssh.com compression: none
debug1: SSH2_MSG_KEX_DH_GEX_REQUEST(2048<3072<8192) sent
debug1: got SSH2_MSG_KEX_DH_GEX_GROUP
debug1: SSH2_MSG_KEX_DH_GEX_INIT sent
debug1: got SSH2_MSG_KEX_DH_GEX_REPLY
debug1: Server host key: ssh-rsa
SHA256:CYfI+cpP+T4kyOTSjoe80CUgt0GL3tXisLch/8axxx
debug1: using hostkeyalias: compute.1694426511137997XXXX
debug1: Host 'compute.1694426511137997XXXX' is known and matches the RSA host key.
debug1: Found key in /Users/myusername/.ssh/google_compute_known_hosts:1
debug1: rekey after 429496XXXX blocks
debug1: SSH2_MSG_NEWKEYS sent
debug1: expecting SSH2_MSG_NEWKEYS
debug1: SSH2_MSG_NEWKEYS received
debug1: rekey after 4294967296 blocks
debug1: SSH2_MSG_SERVICE_ACCEPT received
debug1: Authentications that can continue: publickey,gssapi-keyex,gssapi-with-mic
debug1: Next authentication method: publickey
debug1: Offering public key: RSA
SHA256:rP2W5aPDGoUEqYu0XYUaTuqUZ7/FqRTTuc3HOWaXxxx /Users/myusername/.ssh/google_compute_engine
debug1: Authentications that can continue: publickey,gssapi-keyex,gssapi-with-mic
debug1: No more authentication methods to try.
myusername#104.XXX.XXX.XXX: Permission denied (publickey,gssapi-keyex,gssapi-with-mic).
ERROR: (gcloud.compute.ssh) [/usr/bin/ssh] exited with return code [255].
Here's what I have tried so far
Deleted my SSH keys from project metadata page
Compute instances are setup to inherit the SSH keys from project, so there was nothing to change in the SSH page of the instances
I authenticated with Gcloud again with ‘gcloud auth login’ using my account.
I then did the ‘gcloud init’ to again setup the configuration, default project and timezone
Verified that firewall on port 22 is open using ‘gcloud compute firewall-rules list’
Renewed my rsa public key using ‘ssh-keygen -t rsa -f ~/.ssh/google_compute_engine -C myusername’
Updated the gcloud metadata with new public key using ‘gcloud compute ssh svuppala#instancename’
Verified the same at https://console.cloud.google.com/compute/metadata/sshKeys?project=xxx
Reinstalled gcloud sdk and performed the above steps again
I never added any keys to the instance directly
I seem to have exhausted all the options here. Any help is highly appreciated!