When i was trying to connect to my server from putty from my laptop last night. Server was refusing to connect via ssh and giving me the below error.

[root@manny ~]# ssh localhost
ssh: connect to host localhost port 22: Connection refused

So i checked the ssh service and it was stopped. I tried to restart it then it was giving this error, so i checked the file permissions for /var/empty/sshd. It was 777, some how changed. so i removed write permission for it and restarted ssh service and working fine. Take a look at it.

[root@manny ~]# ls -ld /var/empty/sshd/
drwxrwxrwx. 2 root root 4096 Aug 12  2010 /var/empty/sshd/sss
[root@manny ~]# chmod go-x -R /var/empty/sshd/
[root@manny ~]# /etc/init.d/sshd restart
[root@manny ~]# /etc/init.d/sshd start
Starting sshd:                                        [  OK  ] [root@manny ~]# chkconfig sshd on

Hope it works for you also.