This error could probably be coz of the following:
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The instance might not be running the guest environment: Verify that the guest environment is installed and running.
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The boot disk of the instance has run out of free space: To identify issues with disk space, check the serial console output of the instance and look for "No space left" errors.
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Permissions or ownership on $HOME, $HOME/.ssh, or $HOME/.ssh/authorized_keys might be wrong.