Could be that file ownership/permissions on your home directory got hosed. Run the following command to ensure the 'pi' user owns everything in his home directory:
sudo chown -R pi:pi /home/pi
If you still have issues, you may have to fix directory permissions under /home/pi with the following command:
find /home/pi -type d -exec chmod u+rwx {} \;
EDIT: Changed find command slightly, first cut could have made some things like .ssh/ become too permissive and hinder some functionality (i.e. sshd will refuse to honor .ssh/authorized_keys if permissions are too open).