DO NOT us PenguiNet!
Sadly I am posting that PenguiNet should not be used anymore as it is insecure and forces you to use insecure practices to make it work.
You cannot securely use SSH as PenguiNet! doesn't support modern security ciphers only deprecated insecure ciphers, sadly after 15 + years of using this great tool it is obsolete and the developers are no longer maintaining this application.
Try putty or anything else that is in active development as it will be updated for the real world.
And if the silicon circus fool says its fixed he is lying don't spend a dime on this program its a waste of money and is fraudulent application now as it is useless in 2020
PenguiNet is officially dead. Error 261 is not fixed and cannot be fixed without a new major version.