When you pass a key to the GCE driver and the path doesn't exist, it ends up passing the buck down to PyCrypto, because it assumes that it isn't a keypath. Relevant lines are here (snipped from `_init_` method of `GoogleBaseAuthConnection`):
The problem is the keypath doesn't exist (and obviously it's not a file), so instead of a nice error message saying 'invalid file path', you get a ValueError from PyCrypto saying 'ValueError: RSA key format is not supported' which is problematic especially because you also get this error if you have the wrong version of PyCrypto installed. Given that PyCrypto actually expects bytes, I think it makes sense for libcloud to be responsible for this error.
I encountered this using salt and there's an open issue to deal with it on the salt end here - https://github.com/saltstack/salt/pull/15589