Found this in /var/log/secure.
Apr 28 12:51:35 theserver sshd: Authentication refused: bad ownership or modes for directory /home/theuser
It turns out the the failure was due to the user's group permissions on the remote machine for two important folders. Both the home folder and the .ssh folder had the following permissions:
drwxrwx--- 36 theuser thegroup 4096 Apr 28 11:56 ..
chmod 700 for both /home/theuser and /home/theuser/.ssh fixed the problem.