Heads up I'm a noob with linux and networking.

I set up a ubuntu server and I have a static ip for my network. When I try to connect to the server at home (external), it prompts me to log in. I supply the correct password (or incorrect pw), I get the error Permission denied, please try again.

and after 3 times I get

Permission denied (publickey,gssapi-with-mic,password)

I am however able to connect with SSH from another computer in the same network with ssh < internal ip of server >

I'm connecting with mac os x and my config file is vanilla.

Note: During installation of ubuntu it says I don't have a default route or something while doing auto network configuration, but I ignored it and continued the installation, could this be the problem?

EDIT:

I have tried the below, I have nothing in hosts.allow and also iptables shows the ports that I have allowed, which is 22.

I checked the auth.log, and there is nothing when I connect to it remotely (even when it says permission denied). I have tried connecting to it internally and the correct authentication logs show. Any idea whats wrong?