Setting up Chef Node: Amazon EC2 instance is create but bootstrap fails

I am trying to get going with Chef and the freebie Chef server from Opscode.

I got my Chef workstation configured on a local VM running Ubuntu 12.04LTS. I downloaded the chef-repo from GitHub as per the instructions.

I downloaded the keys from Opscode (myorg.pem as the organizational key and jgodse.pem as the personal key). I also had a keys from Amazon to use their EC2 API (AWS_ACCESS_KEY_ID and AWS_SECRET_ACCESS_KEY which I set as environment variables). I also created a key at Amazon for use with the instance (deploy.pem). All the keys are in ~chef-repo/.chef/ and in ~/.ssh/ , which is probably overkill, but I just want it to work.

I managed to create an EC2 instance using knife ec2, but knife-ec2 couldn't finish the job and bootstrap the chef-client, because it couldn't log into the newly created server.

Here is my session.

railsdev@localchef:~/Chef/chef-repo$ knife ec2 server create -r 'recipe[apt]'
Instance ID: i-fa4c1b99
Flavor: m1.small
Image: ami-xxxxxxxx
Region: us-east-1
Availability Zone: us-east-1b
Security Groups: default
Tags: {"Name"=>"i-fa4c1b99"}
SSH Key: deploy

Waiting for instance.....................
Public DNS Name: ec2-107-21-188-230.compute-1.amazonaws.com
Public IP Address: 107.21.188.230
Private DNS Name: ip-10-10-206-167.ec2.internal
Private IP Address: 10.10.206.167

Waiting for sshd...done
Bootstrapping Chef on ec2-107-21-188-230.compute-1.amazonaws.com
Failed to authenticate root - trying password auth
Enter your password: 
ERROR: Net::SSH::AuthenticationFailed: root@ec2-107-21-188-230.compute-1.amazonaws.com
railsdev@localchef:~/Chef/chef-repo$ 

I was able to ssh into this instance using

jgodse/Chef/chef-repo> ssh -i ./.chef/deploy.pem ubuntu@ec2-107-21-188-230.compute-1.amazonaws.com

Any clues as to why this wont authenticate with Knife EC2?

My ~chef-repo/.chef/knife.rb file looks like this:

current_dir = File.dirname(__FILE__)
log_level                :info
log_location             STDOUT
node_name                "jgodse"
client_key               "#{current_dir}/jgodse.pem"
validation_client_name   "myorg-validator"
validation_key           "#{current_dir}/myorg-validator.pem"
chef_server_url          "https://api.opscode.com/organizations/myorg"
cache_type               'BasicFile'
cache_options( :path => "#{ENV['HOME']}/.chef/checksums" )
cookbook_path            ["#{current_dir}/../cookbooks"]

knife[:aws_access_key_id]      = ENV['AWS_ACCESS_KEY_ID']
knife[:aws_secret_access_key]  = ENV['AWS_SECRET_ACCESS_KEY']

# Default flavor of server (m1.small, c1.medium, etc).
knife[:flavor] = "m1.small"

# Default AMI identifier, e.g. ami-12345678
knife[:image] = "ami-xxxxxxxx"

# AWS Region
#knife[:region] = "us-east-1"

# AWS Availability Zone. Must be in the same Region.
knife[:availability_zone] = "us-east-1b"

# A file with EC2 User Data to provision the instance.
#knife[:aws_user_data] = ""

# AWS SSH Keypair.
knife[:aws_ssh_key_id] = "deploy"