This error could probably be coz of the following:
- 
The instance might not be running the guest environment: Verify that the guest environment is installed and running.
 
- 
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. 
 
- 
Permissions or ownership on $HOME, $HOME/.ssh, or $HOME/.ssh/authorized_keys might be wrong.