I believe the problem is caused by a bug fixed in Net::SSH2 0.18, which I just released (the version is now synced to libssh2, hence the jump); it's on CPAN but not yet indexed. The bug is that if the value of a POSIX flag (O_RDONLY) is 0, then it doesn't get correctly converted to an SFTP flag, so we'll try to open the file with no flags, which is invalid. Please try 0.18 and let me know if that fixes the problem.