I recently had to upgrade my version of OpenSSH from 4.7 to 5.0 on my
MacBook (Darwin). I installed the latest 'portable' tarball and
removed the system version:
$ ssh -V
OpenSSH_5.0p1, OpenSSL 0.9.7l 28 Sep 2006
$ which ssh
/usr/bin/ssh

sshd is the same version, installed in /usr/sbin/sshd. Now, things are
a bit broken: I am able to ssh from another machine into my MacBook,
so the server (sshd) is working, but the outgoing client (ssh) hangs
indefinitely on connect. ssh-add also hangs on any operation. ssh-
agent shows:
SSH_AUTH_SOCK=/tmp/ssh-35xNGanxBs/agent.2282; export SSH_AUTH_SOCK;
SSH_AGENT_PID=2283; export SSH_AGENT_PID;
echo Agent pid 2283;

The interesting bits from an 'ssh -vvv localhost' session are:
....
debug3: Not a RSA1 key file /Users/jd/.ssh/id_rsa.
debug2: key_type_from_name: unknown key type '-----BEGIN'
debug3: key_read: missing keytype
debug2: key_type_from_name: unknown key type 'Proc-Type:'
debug3: key_read: missing keytype
debug2: key_type_from_name: unknown key type 'DEK-Info:'
debug3: key_read: missing keytype
debug3: key_read: missing whitespace
....
debug3: key_read: missing whitespace
debug2: key_type_from_name: unknown key type '-----END'
debug3: key_read: missing keytype

The ssh connection attempt just hangs and sits at:
....
debug2: service_accept: ssh-userauth
debug1: SSH2_MSG_SERVICE_ACCEPT received

I don't know why the error 'Not a RSA1 key file' comes up, as my
private key (id_rsa) remains unchanged and begins thusly:
-----BEGIN RSA PRIVATE KEY-----
Proc-Type: 4,ENCRYPTED
DEK-Info: DES-EDE3-CBC,E4E5E1C1F000924A
....

Any thoughts on what may be wrong or what else I can try?

Thanks,
~John