I've as of yet been unable to correct this problem. I've tried adjusting MaxStartups to >10, clearing out the files listed in known_hosts, and compared configs between a server that is working properly but as of yet I cannot figure this out.
My thought is that the ssh_exchange_identification would suggest the problem resides on the destination (remote) end, but I can connect to that destination using other computers within my internal network without issue.
hllhiegwtest1:/home/username/.ssh # sftp -vvvvvv email@example.com Connecting to sftp.axolotl.com... OpenSSH_5.1p1, OpenSSL 0.9.8h 28 May 2008 debug1: Reading configuration data /etc/ssh/ssh_config debug1: Applying options for * debug2: ssh_connect: needpriv 0 debug1: Connecting to sftp.somewebsite.com [X.X.X.X] port 22. debug1: Connection established. debug1: permanently_set_uid: 0/0 debug1: identity file /root/.ssh/id_rsa type -1 debug1: identity file /root/.ssh/id_dsa type -1 ssh_exchange_identification: Connection closed by remote host Couldn't read packet: Connection reset by peer