Problem
The sshd server implementation made by HP on ILO cards - especially older ones - can be notoriously difficult to use with newer versions of OpenSSH.
The main reason is algorithms rendered unsafe by old age combined with a very strange implementation by HPs hands.
Solution
The following configuration on the client side made my current version of OpenSSH play reasonably nice with ILO / SSH. There is some unexplained disconnects by the server I cannot figure out.
In .ssh/config
Host <hostname>/<IP>
PasswordAuthentication yes
ChallengeResponseAuthentication no
GSSAPIAuthentication no
HostbasedAuthentication no
PubkeyAuthentication no
RSAAuthentication no
Compression no
ForwardAgent no
ForwardX11 no
Ciphers aes128-cbc,3des-cbc,blowfish-cbc,cast128-cbc,arcfour128
HostKeyAlgorithms ssh-rsa,ssh-dss
KexAlgorithms diffie-hellman-group1-sha1
MACs hmac-sha1
ServerAliveInterval 0
Result
You can now SSH to the ILO card and use the cmd line tool from HP. Issue a
</>hpiLO-> remcons
To get a real HW console bridged over the network.