While installing Ubuntu 16.04 I decided to take the option of encrypting my home directory. I also use ssh key-only authorization, as password logins are disabled for security.
I was able to solve the "not being able to log in because .ssh/authorized_keys" issue using this: https://stephen.rees-carter.net/thought/encrypted-home-directories-ssh-key-authentication. In summary:
sudo vim ~/.profile
and then entering
ecryptfs-mount-private cd /home/username
But now, X11 forwarding over ssh is broken. It appears the MMC (MIT Magic Cookie) .Xauthority file is not making it into the un-encrypted home directory.