There are a variety of solutions around the web. I will try to condense the available options into one post. Please try your connection again after every step.
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Step 1: Attempt adding you public key to Heroku
heroku keys:add ~/.ssh/id_rsa.pub // or just heroku keys:add and it will prompt you to pick one of your keys
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Step 2: Generate a new set of SSH keys, then attempt the first step again
https://help.github.com/articles/generating-ssh-keys
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Step 3: Verify and/or modify your config file
vim ~/.ssh/config Host heroku.com Hostname heroku.com Port 22 IdentitiesOnly yes IdentityFile ~/.ssh/id_rsa <--- Should be your public SSH key TCPKeepAlive yes User jsmith@gmail.com
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Step 4: Remove the heroku remote from git, the recreate the connection, adding the remote via heroku create will only be an option for new repositories. Be sure to delete your old repo that you originally attempted to create
$ git remote rm heroku $ heroku create
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Step 5: Reinstall Heroku Toolkit