The title of this thread is that SSH is not working. But I believe that if you get the prompt for user name and password that SSH is working because if SSH were not establishing the session then there would not be a prompt for user name and password. It sounds like the problem is in authentication (or perhaps authorization). The best way to verify whether SSH is working is to use the command show ip ssh. If it comes back and tells you what version of SSH is enabled (should be version 2 according to your post) then SSH is working.
I agree that it may be helpful to see the configuration of the vty lines. It would also be helpful to see the configuration of aaa.