Several things you may try:
- use discovery2.usc.edu as your ssh host address, as pointed out in this previous post.
- delete the previous vscode server on the cluster.
- add the following in your settings.json for vscode:
"remote.SSH.showLoginTerminal": true,
"remote.SSH.useLocalServer": true,
"remote.SSH.localServerDownload": "auto",
These steps worked for me on Windows.