Visual Studio Code – From Windows to Rpi OS, started getting "Resolver error: Error: The VS Code Server failed to start" after VSCode update. Any suggestions please?

I have two Linux servers (raspberry pi bullseye fully up to date) on my LAN, one is a backup server, the other is for development. Their setup is broadly similar.

I’m running VS Code (Version: 1.77.0) on Windows 10 and accessing those servers via SSH. I am not using a proxy or Docker.
Four days ago, both servers were working fine with VS Code. When I closed down, I saw that an update to VS Code would be installed next time I started.

The next day, I found that VS Code works as usual on the backup server, but fails as follows when trying to access the development server.

After many repetitions of ‘> Waiting for server log…’ it gives the following stack trace:

[00:20:27.191] Resolver error: Error: The VS Code Server failed to start
    at m.ServerInstallError (c:UsersRoy.vscodeextensionsms-vscode-remote.remote-ssh-0.98.0outextension.js:1:584322)
    at f (c:UsersRoy.vscodeextensionsms-vscode-remote.remote-ssh-0.98.0outextension.js:1:578379)
    at t.handleInstallOutput (c:UsersRoy.vscodeextensionsms-vscode-remote.remote-ssh-0.98.0outextension.js:1:581404)
    at t.tryInstall (c:UsersRoy.vscodeextensionsms-vscode-remote.remote-ssh-0.98.0outextension.js:1:681793)
    at async c:UsersRoy.vscodeextensionsms-vscode-remote.remote-ssh-0.98.0outextension.js:1:644041
    at async t.withShowDetailsEvent (c:UsersRoy.vscodeextensionsms-vscode-remote.remote-ssh-0.98.0outextension.js:1:647359)
    at async t.resolve (c:UsersRoy.vscodeextensionsms-vscode-remote.remote-ssh-0.98.0outextension.js:1:645091)
    at async c:UsersRoy.vscodeextensionsms-vscode-remote.remote-ssh-0.98.0outextension.js:1:720839
[00:20:27.194] ------

[00:20:27.419] > 
[00:20:28.481] "install" terminal command done
[00:20:28.481] Install terminal quit with output: 

There is no output after that last line.

I can access both servers from Windows with PuTTY and WinSCP.

After searching I tried the following suggestions that I’ve found online (mostly here), but none worked:

1. Deleted .vscode-server directory in my Linux /home/me directory.
   retried, it regenerated .vscode-server directory and contents but failed as above

2. In VSC opened command palette
   Selected "Remote-SSH: kill VS Code Server on Host…"
   Selected the host that VS Code can’t connect to.
   Restarted VS Code and tried to reconnect.
   Failed as above

3. Checked disk space. There is plenty available

4. Checked VS Code extensions – none are flagged as needing update. Anyway as I can access one of the servers with the same Windows installation of VS Code, I don’t think this can be the problem. Nevertheless I uninstalled Remote – SSH and Remote – SSH: Editing and re-installed them.
   Failed as above

5. Deleted the line for the ip address of problem server in C:UsersRoy.sshknown_hosts
   Then repeated the steps in 2. above. Failed as above.
   Checked that the entry in C:UsersRoy.sshknown_hosts had been regenerated – it had.

6. Added another ip address for the server, tried to access through that. I wasn’t optimistic, and it failed as above.

7. Uninstalled and re-installed ssh:

    sudo service ssh stop
    sudo apt-get --purge remove openssh-client openssh-server
    sudo apt autoremove
    sudo apt-get update
    sudo apt-get upgrade
    sudo apt-get install openssh-server
    sudo service ssh status

Failed as above.

I’m stuck on this. Four days ago everything was running as normal, then a VS Code update (apparently) caused this problem, but only on one of the servers.

Any help greatly appreciated.