Setting up algo on lightsail fails with permission denied (public key)

[Windrill]

Starting on a fresh lightsail instance and following the setup directions, I always timeout on this step and this error:

TASK [debug] **********************************************************************************************************************************************************************************************
task path: /home/ubuntu/algo/playbooks/cloud-post.yml:50                                                                                                                                                   
ok: [localhost] => {                                                                                                                                                                                       
    "IP_subject_alt_name": "13.229.92.115"                                                                                                                                                                 
}                                                                                                                                                                                        

<13.229.92.115> SSH: EXEC ssh -o ControlMaster=auto -o ControlPersist=60s -o UserKnownHostsFile=/dev/null -o ConnectTimeout=6 -o ConnectionAttempts=30 -o IdentitiesOnly=yes -o StrictHostKeyChecking=no -o
 Port=4160 -o 'IdentityFile="/tmp/algo-ssh.pem"' -o KbdInteractiveAuthentication=no -o PreferredAuthentications=gssapi-with-mic,gssapi-keyex,hostbased,publickey -o PasswordAuthentication=no -o 'User="alg
o"' -o ConnectTimeout=60 -o ControlPath=/home/ubuntu/.ansible/cp/71f9b3905f 13.229.92.115 '/bin/sh -c '"'"'echo ~algo && sleep 0'"'"''
<13.229.92.115> (255, b'', b"Warning: Permanently added '[13.229.92.115]:4160' (ECDSA) to the list of known hosts.\r\[email protected]: Permission denied (publickey).\r\n")
<13.229.92.115> ssh_retry: attempt: 8, ssh return code is 255. cmd ([b'ssh', b'-o', b'ControlMaster=auto', b'-o', b'ControlPersist=60s', b'-o', b'UserKnownHostsFile=/dev/null', b'-o', b'ConnectTimeout=6'
, b'-o', b'ConnectionAttempts=30', b'-o', b'IdentitiesOnly=yes', b'-o', b'StrictHostKeyChecking=no', b'-o', b'Port=4160', b'-o', b'IdentityFile="/tmp/algo-ssh.pem"', b'-o', b'KbdInteractiveAuthentication
=no', b'-o', b'PreferredAuthentications=gssapi-with-mic,gssapi-keyex,hostbased,publickey', b'-o', b'PasswordAuthentication=no', b'-o', b'User="algo"', b'-o', b'ConnectTimeout=60', b'-o', b'ControlPath=/h
ome/ubuntu/.ansible/cp/71f9b3905f', b'13.229.92.115', b"/bin/sh -c 'echo ~algo && sleep 0'"]...), pausing for 30 seconds

Cannot tell what is the cause of this issue. There is an issue report that seemed to have the same error, but te permissions of the home directory belongs to ubuntu already as expected.

Steps to Reproduce:

sudo apt-get update && sudo apt-get upgrade -y

git clone https://github.com/trailofbits/algo.git  &&
sudo apt install -y --no-install-recommends python3-virtualenv && 
cd algo &&
python3 -m virtualenv --python="$(command -v python3)" .env &&
  source .env/bin/activate &&
  python3 -m pip install -U pip virtualenv &&
  python3 -m pip install -r requirements.txt


source .env/bin/activate &&
ansible-playbook main.yml -vvv -e "provider=lightsail
                                server_name=algo-server
                                ondemand_cellular=false
                                ondemand_wifi=false
                                dns_adblocking=true
                                ssh_tunneling=false
                                store_pki=true
                                aws_access_key=xxxx
                                aws_secret_key=xxxxxx
                                region=ap-southeast-1"

SSH Logs:

(.env) ubuntu@ip-xxxxx:~/algo$ ssh  -vvv -o ControlMaster=auto -o ControlPersist=60s -o IdentitiesOnly=yes -o StrictHostKeyChecking=no -o Port=4160 -o 'IdentityFile="/tmp/algo-ssh.pem"' -o KbdInteractiveAuthentication=no -o PreferredAuthentications=gssapi-with-mic,gssapi-keyex,hostbased,publickey -o PasswordAuthentication=no -o 'User="algo"' -o ConnectTimeout=60 -o ControlPath=/home/ubuntu/.ansible/cp/71f9b3905f 13.229.92.115

...
debug1: Will attempt key: /tmp/algo-ssh.pem  explicit
debug2: pubkey_prepare: done
debug3: send packet: type 5
debug3: receive packet: type 7
debug1: SSH2_MSG_EXT_INFO received
debug1: kex_input_ext_info: server-sig-algs=<ssh-ed25519,ssh-rsa,rsa-sha2-256,rsa-sha2-512,ssh-dss,ecdsa-sha2-nistp256,ecdsa-sha2-nistp384,ecdsa-sha2-nistp521>
debug3: receive packet: type 6
debug2: service_accept: ssh-userauth
debug1: SSH2_MSG_SERVICE_ACCEPT received
debug3: send packet: type 50
debug3: receive packet: type 51
debug1: Authentications that can continue: publickey
debug3: start over, passed a different list publickey
debug3: preferred gssapi-with-mic,gssapi-keyex,hostbased,publickey
debug3: authmethod_lookup publickey
debug3: remaining preferred: ,gssapi-keyex,hostbased,publickey
debug3: authmethod_is_enabled publickey
debug1: Next authentication method: publickey
debug1: Trying private key: /tmp/algo-ssh.pem
debug3: sign_and_send_pubkey: RSA SHA256:A3WyivNxHIYri5OZWlHbgHF8h1O/3KofqJOkXcX/lGE
debug3: sign_and_send_pubkey: signing using rsa-sha2-512 SHA256:A3WyivNxHIYri5OZWlHbgHF8h1O/3KofqJOkXcX/lGE
debug3: send packet: type 50
debug2: we sent a publickey packet, wait for reply
debug3: receive packet: type 51
debug1: Authentications that can continue: publickey
debug2: we did not send a packet, disable method
debug1: No more authentication methods to try.
[email protected]: Permission denied (publickey).

[Windrill]

Resolved. Condition was not met:
The name of the server must be unique and cannot exist already

The VPN setup steps can be done on any computer, just the target needs to be the lightsail instance.