SSHD Gives error could not open Authorized Keys, although permissions seem correct

I'm unable to login to SSH because of the following error in /var/log/secure (according to the debug logs):

Dec 19 18:01:05 hostname sshd[25119]: debug1: trying public key file /root/.ssh/authorized_keys
Dec 19 18:01:05 hostname sshd[25119]: debug1: Could not open authorized keys '/root/.ssh/authorized_keys': Permission denied

I have the following permissions set on root

chmod 700 ~/.ssh
chmod 600 ~/.ssh/authorized_keys
chmod go-wrx ~

ls -lah gives the following output for those directories:

drwx------.   6 root root 4.0K Dec 19 17:46 root
drwx------.  2 root root 4.0K Dec 19 17:41 .ssh
-rw-------. 1 root root  416 Dec 19 17:12 authorized_keys

I know the key I'm using is correct, as I just setup another server with it without any problems.

I'm running: CentOS release 6.4 (Final)

I've added my sshd config in case there's something misconfigured in there that might be causing the issue:

#       $OpenBSD: sshd_config,v 1.80 2008/07/02 02:24:18 djm Exp $

# This is the sshd server system-wide configuration file.  See
# sshd_config(5) for more information.

# This sshd was compiled with PATH=/usr/local/bin:/bin:/usr/bin

# The strategy used for options in the default sshd_config shipped with
# OpenSSH is to specify options with their default value where
# possible, but leave them commented.  Uncommented options change a
# default value.

#Port 22
#AddressFamily any
#ListenAddress 0.0.0.0
#ListenAddress ::

# Disable legacy (protocol version 1) support in the server for new
# installations. In future the default will change to require explicit
# activation of protocol 1
Protocol 2

# HostKey for protocol version 1
#HostKey /etc/ssh/ssh_host_key
# HostKeys for protocol version 2
#HostKey /etc/ssh/ssh_host_rsa_key
#HostKey /etc/ssh/ssh_host_dsa_key

# Lifetime and size of ephemeral version 1 server key
#KeyRegenerationInterval 1h
#ServerKeyBits 1024

# Logging
# obsoletes QuietMode and FascistLogging
#SyslogFacility AUTH
SyslogFacility AUTHPRIV
LogLevel DEBUG

# Authentication:

#LoginGraceTime 2m
PermitRootLogin yes
StrictModes no
#MaxAuthTries 6
#MaxSessions 10

RSAAuthentication yes
PubkeyAuthentication yes
AuthorizedKeysFile      .ssh/authorized_keys
#AuthorizedKeysCommand none
#AuthorizedKeysCommandRunAs nobody

# For this to work you will also need host keys in /etc/ssh/ssh_known_hosts
#RhostsRSAAuthentication no
# similar for protocol version 2
#HostbasedAuthentication no
# Change to yes if you don't trust ~/.ssh/known_hosts for
# RhostsRSAAuthentication and HostbasedAuthentication
#IgnoreUserKnownHosts no
# Don't read the user's ~/.rhosts and ~/.shosts files
IgnoreRhosts yes

# To disable tunneled clear text passwords, change to no here!
#PasswordAuthentication yes
#PermitEmptyPasswords no
PasswordAuthentication yes

# Change to no to disable s/key passwords
#ChallengeResponseAuthentication yes
ChallengeResponseAuthentication no

# Kerberos options
#KerberosAuthentication no
#KerberosOrLocalPasswd yes
#KerberosTicketCleanup yes
#KerberosGetAFSToken no
#KerberosUseKuserok yes

# GSSAPI options
#GSSAPIAuthentication no
GSSAPIAuthentication yes
#GSSAPICleanupCredentials yes
GSSAPICleanupCredentials yes
#GSSAPIStrictAcceptorCheck yes
#GSSAPIKeyExchange no

# Set this to 'yes' to enable PAM authentication, account processing,
# and session processing. If this is enabled, PAM authentication will
# be allowed through the ChallengeResponseAuthentication and
# PasswordAuthentication.  Depending on your PAM configuration,
# PAM authentication via ChallengeResponseAuthentication may bypass
# the setting of "PermitRootLogin without-password".
# If you just want the PAM account and session checks to run without
# PAM authentication, then enable this but set PasswordAuthentication
# and ChallengeResponseAuthentication to 'no'.
#UsePAM no
UsePAM yes

# Accept locale-related environment variables
AcceptEnv LANG LC_CTYPE LC_NUMERIC LC_TIME LC_COLLATE LC_MONETARY LC_MESSAGES
AcceptEnv LC_PAPER LC_NAME LC_ADDRESS LC_TELEPHONE LC_MEASUREMENT
AcceptEnv LC_IDENTIFICATION LC_ALL LANGUAGE
AcceptEnv XMODIFIERS

#AllowAgentForwarding yes
#AllowTcpForwarding yes
#GatewayPorts no
#X11Forwarding no
X11Forwarding yes
#X11DisplayOffset 10
#X11UseLocalhost yes
#PrintMotd yes
#PrintLastLog yes
#TCPKeepAlive yes
#UseLogin no
#UsePrivilegeSeparation yes
#PermitUserEnvironment no
#Compression delayed
#ClientAliveInterval 0
#ClientAliveCountMax 3
#ShowPatchLevel no
UseDNS no
#PidFile /var/run/sshd.pid
#MaxStartups 10:30:100
#PermitTunnel no
#ChrootDirectory none

# no default banner path
#Banner none

# override default of no subsystems
Subsystem       sftp    /usr/libexec/openssh/sftp-server

# Example of overriding settings on a per-user basis
#Match User anoncvs
#       X11Forwarding no
#       AllowTcpForwarding no
#       ForceCommand cvs server

Any ideas would be much appreciated.

Solution

If the permissions are correct, SELinux might still be preventing sshd from opening the file.

Try fixing the labels inside the .ssh directory (and maybe $HOME):

restorecon -FRvv ~/.ssh

If the user account uses non-standard home path, default labels for the path need to be added to the local configuration first:

semanage fcontext -a -t ssh_home_t "/srv/custom/\.ssh(/.*)?"

(I'm intentionally not suggesting disabling SELinux or setting it to the permissive mode.)