We have servers running openssh 4.3.p2 - 4.5p1
From our workstations we used putty 0.58 to access them.

Recently we upgraded our putty installations to 0.60 and were unable to
access the servers running openssh 4.5p1.

when we try putty throws up a fatal error saying
"Incoming packet was garbled on decryption"

The event log for the session looks like this

2007-06-14 16:59:33 Looking up host "removed"
2007-06-14 16:59:33 Connecting to removed port 22
2007-06-14 16:59:33 Server version: SSH-2.0-OpenSSH_4.5
2007-06-14 16:59:33 We claim version: SSH-2.0-PuTTY_Release_0.60
2007-06-14 16:59:33 Using SSH protocol version 2
2007-06-14 16:59:33 Doing Diffie-Hellman group exchange
2007-06-14 16:59:35 Doing Diffie-Hellman key exchange with hash SHA-256
2007-06-14 16:59:37 Host key fingerprint is:
2007-06-14 16:59:37 removed
2007-06-14 16:59:37 Initialised AES-256 SDCTR client->server encryption
2007-06-14 16:59:37 Initialised HMAC-SHA1 client->server MAC algorithm
2007-06-14 16:59:37 Initialised AES-256 SDCTR server->client encryption
2007-06-14 16:59:37 Initialised HMAC-SHA1 server->client MAC algorithm
2007-06-14 16:59:37 Incoming packet was garbled on decryption

Does anyone have any ideas whats wrong?
Thanks