tested on versions between 1.4.3 to 1.5.3
I got a weird problem which seems that when a gateway connection requires the use of a key it ignores it.
I have 2 configuraitions, 1 with a passworded key, the other a non passworded key.
when I connect to the passworded key gateway, I fail auth even though I got no popup box for the password.
when i connect to the nonpassword key gateway, i get prompted for a password and it seems to just use interactive authentication as the password was for the root account not the key password, totally ignoring that i had a key. This could explain why my passworded key connection failed as no interactive sessions are allowed.
hope this info helps.