I am attempting to connect to my instance via PuTTY but when I attempt to connect with the inbound rule set to my private range (i.e 192.168.2.0/24) it just won't work. When I set it to the insecure 0.0.0.0/24 all is fine. Can anyone explain, or solve this issue. I am running Windows 7 with all current updates. My IP address is not static.
The 192.168.0.0/16 CIDR range is considered a private network, which means it is not routable. This also means that AWS, when receiving the connection from the PuTTY client on your machine (which might have an IP address of 192.168.2.1, for example), does not see the remote address of that connection as the IP address of your server. Instead, AWS probably sees the remote address of that incoming connection as being an IP address from your ISP. That's why allowing "0.0.0.0" as the inbound rule works; it allows incoming addresses from everywhere.
To find out what CIDR range to use as a more restrictive inbound range for your AWS security groups, you might connect in to your instance, then do:
$ env | grep SSH_CONNECTION
SSH_CONNECTION=1.2.3.4 54068 5.6.7.8 22
In particular, you are looking for the SSH_CONNECTION environment variable. Per the ssh man page, the SSH_CONNECTION environment variable
Identifies the client and server ends of the connection. The variable contains four space-separated values: client IP address, client port number, server IP address, and server port number.
Thus the first part of the value, the "1.2.3.4" in my contrived example, would show you the IP address that AWS sees your PuTTY connection as coming from; you can then use that IP address as the basis for a CIDR range.
Hope this helps!