What is determining the IP addresses that your PC and Pi are getting? That 196.254.x.x address range is a link-local as per RFC3927 one that Windows uses for Automatic Private IP Addressing which Apple calls Bonjour. However, as per the Wikipedia:
In IPv4 they are normally only used to assign IP addresses to network interfaces when no external, stateful mechanism of address configuration exists, such as the Dynamic Host Configuration Protocol (DHCP), or when another primary configuration method has failed. In IPv6, link-local addresses are mandatory and required for the internal functioning of various protocol components.
Given that you are able to reach here to the Stack Exchange site I would presume that you have a router that should be providing IPs, possibly in the 192.168.x.y range where x is often 0 or 1, and y is possibly 1 for the router and then goes upwards for other things connected on your LAN.
This error can be caused by IP address clashes, especially if some devices are set to fixed ones (for instance if they are a server/gateway and you want to fix where they are - like your broadband router) and your only dhcp server (normally, again, your router) has not been told to NOT use that fixed address as one for the DHCP pool. I'd suggest getting into your router's configuration and checking the range of addresses used for dhcp does not include any statically assigned ones configured locally on a device itself. Note that many routers do permit you to "reserve" a specific address for devices which you always want to have a fixed address for (e.g. I have one device used as an IPv6 tunnel gateway and local storage server which it is convenient to always be 192.168.1.2 next to the IPv4 router on 192.168.1.1) which is another way to have a fixed address AND for it to be handled by dhcp rather than by locally setting on the device itself.
Unlike the previous answer - which I don't have the reputation to comment on (yet) - I'd strongly urge you NOT to enable
PermitRootLogin without-password UNLESS you have also sorted out a key to secure such logins. By default Pis running Raspbian do not have a root password set so if there is external access to your LAN the Pi will be very insecure - and once you sort out your IP issues so that it is reachable it will be vulnerable.