Your iptables rules are out of order. Line #5 says to reject everything. Line #5 evaluates BEFORE 7, 8, & 9. I would simply flush away all iptables rules (iptables -F) and only use AWS security groups. Using both can cause networking issues because you are blocking from multiple locations. Additionally, I would change your security groups to allow ALL from both VPCs to the other VPC. Do this just to make sure things work, then you can start being more restrictive.