After trying for a while, here is what I needed to do to get it working:
Download Hydra 5.4 (hxxp://freeworld.thc.org/thc-hydra)
sudo apt-get install libssh-2-dev
Download this patch to make Hydra work with libssh 2:
Untar hydra and apply patch:
cd /path/to/hydra; patch -p1 < /path/to/patch
'./configure' (you should see that libssh was detected)
'nano Makefile' and remove '-DLIBPOSTGRES' and '-lpq'
'make' (should compile fine)
'sudo make install'
If you still have problems type 'dpkg -l | grep libssh' and make sure you don't have libssh2-1 installed.