What version of PuTTY are you using? Can you try the latest development snapshot?

I have starnge issue. Yesterday everything works fine but today winscp don't want to connect to by ubuntu server. It stops on opening channel for session after authentication

Log
. 2011-06-30 09:33:03.758 --------------------------------------------------------------------------
. 2011-06-30 09:33:03.758 WinSCP Version 4.3.3 (Build 1340) (OS 5.1.2600 Service Pack 3)
. 2011-06-30 09:33:03.758 Configuration: HKEY_CURRENT_USER\Software\Martin Prikryl\WinSCP 2\
. 2011-06-30 09:33:03.758 Login time: 30 ╚■э№ 2011 у. 9:33:03
. 2011-06-30 09:33:03.758 --------------------------------------------------------------------------
. 2011-06-30 09:33:03.758 Session name: release new (Stored session)
. 2011-06-30 09:33:03.758 Host name: 88.212.206.106 (Port: 22)
. 2011-06-30 09:33:03.774 User name: toor (Password: Yes, Key file: No)
. 2011-06-30 09:33:03.774 Tunnel: No
. 2011-06-30 09:33:03.774 Transfer Protocol: SFTP (SCP)
. 2011-06-30 09:33:03.774 Ping type: -, Ping interval: 30 sec; Timeout: 15 sec
. 2011-06-30 09:33:03.774 Proxy: none
. 2011-06-30 09:33:03.774 SSH protocol version: 2; Compression: No
. 2011-06-30 09:33:03.774 Bypass authentication: No
. 2011-06-30 09:33:03.774 Try agent: Yes; Agent forwarding: No; TIS/CryptoCard: No; KI: Yes; GSSAPI: No
. 2011-06-30 09:33:03.774 Ciphers: aes,blowfish,3des,WARN,arcfour,des; Ssh2DES: No
. 2011-06-30 09:33:03.774 SSH Bugs: -,-,-,-,-,-,-,-,-
. 2011-06-30 09:33:03.774 SFTP Bugs: -,-
. 2011-06-30 09:33:03.774 Return code variable: Autodetect; Lookup user groups: Yes
. 2011-06-30 09:33:03.774 Shell: default
. 2011-06-30 09:33:03.774 EOL: 0, UTF: 2
. 2011-06-30 09:33:03.774 Clear aliases: Yes, Unset nat.vars: Yes, Resolve symlinks: Yes
. 2011-06-30 09:33:03.774 LS: ls -la, Ign LS warn: Yes, Scp1 Comp: No
. 2011-06-30 09:33:03.774 Local directory: default, Remote directory: home, Update: No, Cache: Yes
. 2011-06-30 09:33:03.774 Cache directory changes: Yes, Permanent: Yes
. 2011-06-30 09:33:03.774 DST mode: 1
. 2011-06-30 09:33:03.774 --------------------------------------------------------------------------
. 2011-06-30 09:33:03.805 Looking up host "88.212.206.106"
. 2011-06-30 09:33:03.805 Connecting to 88.212.206.106 port 22
. 2011-06-30 09:33:04.211 Server version: SSH-2.0-OpenSSH_5.8p1 Debian-1ubuntu3
. 2011-06-30 09:33:04.211 We believe remote version has SSH-2 ignore bug
. 2011-06-30 09:33:04.211 Using SSH protocol version 2
. 2011-06-30 09:33:04.211 We claim version: SSH-2.0-WinSCP_release_4.3.3
. 2011-06-30 09:33:04.430 Doing Diffie-Hellman group exchange
. 2011-06-30 09:33:04.852 Doing Diffie-Hellman key exchange with hash SHA-1
. 2011-06-30 09:33:05.289 Host key fingerprint is:
. 2011-06-30 09:33:05.289 ssh-rsa 2048 97:5a:10:88:58:99:0d:e0:63:d8:aa:6a:c4:46:26:57
. 2011-06-30 09:33:05.289 Initialised AES-256 SDCTR client->server encryption
. 2011-06-30 09:33:05.289 Initialised HMAC-SHA1 client->server MAC algorithm
. 2011-06-30 09:33:05.289 Initialised AES-256 SDCTR server->client encryption
. 2011-06-30 09:33:05.289 Initialised HMAC-SHA1 server->client MAC algorithm
! 2011-06-30 09:33:05.727 Using username "toor".
. 2011-06-30 09:33:05.930 Prompt (7, SSH password, , &Password: )
. 2011-06-30 09:33:05.930 Using stored password.
. 2011-06-30 09:33:05.930 Sent password
. 2011-06-30 09:33:06.149 Access granted
. 2011-06-30 09:33:06.336 Opened channel for session
. 2011-06-30 09:33:21.337 Waiting for data timed out, asking user what to do.
. 2011-06-30 09:33:21.337 Asking user:
. 2011-06-30 09:33:21.337 Host is not communicating for 15 seconds.
. 2011-06-30 09:33:21.337
. 2011-06-30 09:33:21.337 Wait for another 15 seconds? ()
. 2011-06-30 09:33:27.993 Attempt to close connection due to fatal exception:
* 2011-06-30 09:33:27.993 Terminated by user.
. 2011-06-30 09:33:27.993 Closing connection.
. 2011-06-30 09:33:27.993 Sending special code: 12
* 2011-06-30 09:33:27.993 (ESshFatal) Terminated by user.
* 2011-06-30 09:33:27.993 Authentication log (see session log for details):
* 2011-06-30 09:33:27.993 Using username "toor".
* 2011-06-30 09:33:27.993
* 2011-06-30 09:33:27.993 Authentication failed.

Putty works fine, but WinSCP does not.
I set 'UseDNS no' on my ssh server but it does not help.
Other similar Ubuntu servers still work fine. (but they are 10.4 and this one is 11.4)