I'm curious why you had to disable password authentication when configuring publickey authentication. SSH will attempt all other authentication mechanisms before it defaults to passwords. This allows you to selectively use keys for certain accounts and passwords for others.
Below, you can see 5 different methods of authentication were tried before the password:
ssh -v test01
...
debug1: Authentications that can continue: publickey,gssapi-keyex,gssapi-with-mic,password
debug1: Next authentication method: gssapi-keyex
debug1: No valid Key exchange context
debug1: Next authentication method: gssapi-with-mic
debug1: Unspecified GSS failure. Minor code may provide more information
Credentials cache file '/tmp/krb5cc_2078676' not found
debug1: Unspecified GSS failure. Minor code may provide more information
Credentials cache file '/tmp/krb5cc_2078676' not found
debug1: Unspecified GSS failure. Minor code may provide more information
debug1: Unspecified GSS failure. Minor code may provide more information
debug1: Next authentication method: publickey
debug1: Offering public key: /home/skohrs/.ssh/id_rsa
debug1: Authentications that can continue: publickey,gssapi-keyex,gssapi-with-mic,password
debug1: Trying private key: /home/skohrs/.ssh/identity
debug1: Trying private key: /home/skohrs/.ssh/id_dsa
debug1: Next authentication method: password
skohrs@test01's password:
debug1: Authentication succeeded (password).
...