AWS- public key denied on opening ssh - ssh

Question

I know there are alot of questions regarding AWS & SSH sessions, and I've attempted to make use of them, but all have failed.
I have an instance running, and the ssh string given by the EC2 Management Console is
ssh -i -v jason.pem ubuntu#ec2-54-227-167-156.compute-1.amazonaws.com
which produces the output
OpenSSH_5.9p1 Debian-5ubuntu1.1, OpenSSL 1.0.1 14 Mar 2012
debug1: Reading configuration data /etc/ssh/ssh_config
debug1: /etc/ssh/ssh_config line 19: Applying options for *
debug1: Connecting to ec2-54-227-167-156.compute-1.amazonaws.com [54.227.167.156] port 22.
debug1: Connection established.
debug1: identity file jason.pem type -1
debug1: identity file jason.pem-cert type -1
debug1: Remote protocol version 2.0, remote software version OpenSSH_5.9p1 Debian- 5ubuntu1
debug1: match: OpenSSH_5.9p1 Debian-5ubuntu1 pat OpenSSH*
debug1: Enabling compatibility mode for protocol 2.0
debug1: Local version string SSH-2.0-OpenSSH_5.9p1 Debian-5ubuntu1.1
debug1: SSH2_MSG_KEXINIT sent
debug1: SSH2_MSG_KEXINIT received
debug1: kex: server->client aes128-ctr hmac-md5 none
debug1: kex: client->server aes128-ctr hmac-md5 none
debug1: sending SSH2_MSG_KEX_ECDH_INIT
debug1: expecting SSH2_MSG_KEX_ECDH_REPLY
debug1: Server host key: ECDSA ea:b6:50:fe:49:49:90:76:03:91:21:6d:73:0e:04:d2
debug1: Host 'ec2-54-227-167-156.compute-1.amazonaws.com' is known and matches the ECDSA host key.
debug1: Found key in /home/jason/.ssh/known_hosts:27
debug1: ssh_ecdsa_verify: signature correct
debug1: SSH2_MSG_NEWKEYS sent
debug1: expecting SSH2_MSG_NEWKEYS
debug1: SSH2_MSG_NEWKEYS received
debug1: Roaming not allowed by server
debug1: SSH2_MSG_SERVICE_REQUEST sent
debug1: SSH2_MSG_SERVICE_ACCEPT received
debug1: Authentications that can continue: publickey
debug1: Trying private key: jason.pem
debug1: read PEM private key done: type RSA
debug1: Authentications that can continue: publickey
debug1: No more authentication methods to try.
Permission denied (publickey).
I've done the following:
Created new keypair, downloaded jason.pem and set to 0400 chmod permissions
Added ChallengeResponseAuthentication yes to /etc/ssh/ssh_config
What exactly is going on, and why is the jason.pem file not being accepted?

Answer 1

The public key on your instance doesn't align with your private keypair. If that instance's configuration is important and you want to keep it (I say this based upon the fact that you shutdown the instance rather than just creating a new one):
Create a new keypair
Create an AMI of the instance you want to access
Create a new instance from that AMI using the new keypair
Attempt to ssh into it again using the new downloaded keypair
400 permissions should be fine for the keypair.