My logs were the same as the original logs posted here. After uninstalling remote-ssh I noticed it is no longer available from the cursor extension marketplace so I installed from here Remote - SSH - Visual Studio Marketplace. This didn’t fix it.
I also tried deleting ~/.cursor-server but that doesn’t solve the issue either.
I have installed 0.41 now and it is working again so maybe something has broken since VS Code 1.93.1 has been added to 0.42?