ssh “permissions are too open” error

Keys need to be only readable by you:

chmod 400 ~/.ssh/id_rsa

If Keys need to be read-writable by you:

chmod 600 ~/.ssh/id_rsa

600 appears to be fine as well (in fact better in most cases, because you don’t need to change file permissions later to edit it).

The relevant portion from the manpage (man ssh)

 ~/.ssh/id_rsa
         Contains the private key for authentication.  These files contain sensitive 
         data and should be readable by the user but not
         accessible by others (read/write/execute).  ssh will simply ignore a private 
         key file if it is              
         accessible by others.  It is possible to specify a
         passphrase when generating the key which will be used to encrypt the sensitive 
         part of this file using 3DES.

 ~/.ssh/identity.pub
 ~/.ssh/id_dsa.pub
 ~/.ssh/id_ecdsa.pub
 ~/.ssh/id_rsa.pub
         Contains the public key for authentication.  These files are not sensitive and 
         can (but need not) be readable by anyone.