Applications :: Public / Private Key SSH Authentication Failing

I've got an old iBook G4 that I'm using as a file server. I've set up public/private key SSH authentication on the machine. Here are the steps I've followed: Create a non-admin user account on the iBook. ('craig'). Log in on the iBook physically, and create a public/private key combination that is password protected. I was very careful to remember my password.
Add the public key to authorized_keys2, which is the file specified in /etc/sshd_config
I used a USB thumbdrive to transfer the private key to my Macbook. I tried to log in to the iBook using:

Code:
ssh 192.168.1.147 -i ~/Desktop/craig/id_dsa -v

It prompts me for a password, but entering it properly does not grant access, the window just pops up again. Running in verbose mode, I see:

Code:
debug1: Authentications that can continue: gssapi,publickey,keyboard-interactive
debug1: Next authentication method: publickey
debug1: Offering public key: /Users/Craig/.ssh/id_dsa_craig
debug1: Authentications that can continue: gssapi,publickey,keyboard-interactive
debug1: Trying private key: /Users/Craig/Desktop/craig/id_dsa
debug1: PEM_read_PrivateKey failed
debug1: read PEM private key done: type <unknown>
debug1: PEM_read_PrivateKey failed
debug1: read PEM private key done: type <unknown>
debug1: PEM_read_PrivateKey failed
debug1: read PEM private key done: type <unknown>

First, it's trying to use a public key in my .ssh folder that I don't specify. Second, when it finally gets around to using the private key I suggested, authentication fails. I can post my sshd_config file if you think it will help, but I don't want to clog the tubes.