I am having a separate problem running WordPress on OSX Lion (Desktop). I usually do updates via SSH. I managed to PHP to support SSH again, but when I try to an update (of a theme or extension), the update seems to hang.
Checking the /var/log/secure.log on the Mac, it appears that the log in succeeds, albeit slowly, first reporting
Jul 26 14:25:16 XXXX sshd[14795]: subsystem request for sftp by user XXXX
Jul 26 14:26:38 XXXX sshd[14795]: Received disconnect from XXXXX: 11: disconnected by user
Jul 26 14:29:06 XXXX sshd[14852]: Accepted password for XXXXX from 199.17.102.218 port 57547 ssh2
Jul 26 14:29:06 XXXX sshd[14864]: subsystem request for sftp by user XXXX
Jul 26 14:29:07 XXXX sshd[14864]: Received disconnect from XXXXX: 11: PECL/ssh2 (http://pecl.php.net/packages/ssh2)
then the webpage advances to indicate the first download and the log shows
Jul 26 14:29:37 XXXX sshd[14896]: Accepted password for XXXX from XXXX port 57654 ssh2
Jul 26 14:29:37 XXXX sshd[14901]: subsystem request for sftp by user XXXX
but it never gets past this point. Manually doing ssh and sftp to the server appear to work fine.