publickey authentication only works for me if I've already got one ssh session open.

I am trying to log into a host running Ubuntu 10.10 desktop with publickey authentication, and it fails when I first log in:

[me@my-laptop:~]$ ssh -vv host
...
debug1: Next authentication method: publickey
debug1: Offering public key: /Users/me/.ssh/id_rsa
...
debug2: we did not send a packet, disable method
debug1: Next authentication method: password
me@hosts's password: 

And the /var/log/auth.log output:

Jan 16 09:57:11 host sshd[1957]: reverse mapping checking getaddrinfo for cpe-70-114-155-20.austin.res.rr.com [70.114.155.20] failed - POSSIBLE BREAK-IN ATTEMPT!
Jan 16 09:57:13 host sshd[1957]: pam_sm_authenticate: Called
Jan 16 09:57:13 host sshd[1957]: pam_sm_authenticate: username = [astacy]
Jan 16 09:57:13 host sshd[1959]: Passphrase file wrapped
Jan 16 09:57:15 host sshd[1959]: Error attempting to add filename encryption key to user session keyring; rc = [1]
Jan 16 09:57:15 host sshd[1957]: Accepted password for astacy from 70.114.155.20 port 42481 ssh2
Jan 16 09:57:15 host sshd[1957]: pam_unix(sshd:session): session opened for user astacy by (uid=0)
Jan 16 09:57:20 host sudo:   astacy : TTY=pts/0 ; PWD=/home/astacy ; USER=root ; COMMAND=/usr/bin/tail -f /var/log/auth.log

The strange thing is that once I've got this first login session, I run the exact same ssh command, and publickey authentication works:

[me@my-laptop:~]$ ssh -vv host
...
debug1: Server accepts key: pkalg ssh-rsa blen 277
...
[me@host:~]$ 

And the /var/log/auth.log output is:

Jan 16 09:59:11 host sshd[2061]: reverse mapping checking getaddrinfo for cpe-70-114-155-20.austin.res.rr.com [70.114.155.20] failed - POSSIBLE BREAK-IN ATTEMPT!
Jan 16 09:59:11 host sshd[2061]: Accepted publickey for astacy from 70.114.155.20 port 39982 ssh2
Jan 16 09:59:11 host sshd[2061]: pam_unix(sshd:session): session opened for user astacy by (uid=0)

What do I need to do to make publickey authentication work on the first login?

NOTE: When I installed Ubuntu 10.10, I checked the 'encrypt home folder' option. I'm wondering if this has something to do with the log message "Error attempting to add filename encryption key to user session keyring"