Having said that, what is the syntax of your hosts.deny? It should be: "sshd: IP: deny". However, at this point, I would start a new backup from backups, but during a new installation, and I would only restore data, not the system as a whole.
If there is an SSH level exploit, like a few years ago, hosts.deny will not do anything. It is better to firewall on SSH to select IP addresses than to use hosts.deny.