I did some more playing with combinations of package versions, and here's what I found:
all packages at 4.2.1-7: broken all packages at 4.2.1-6: works xserver-xfree86 at 4.2.1-7, rest at 4.2.1-6: broken xlibs at 4.2.1-7, rest at 4.2.1-6: broken xserver-xfree86 and xlibs at 4.2.1-6, rest at 4.2.1-7: works So it breaks if either xserver-xfree86 or xlibs is upgraded, but it doesn't seem to matter for the rest of the X packages. Which leads me to conclude: - this is not necessarily an xserver-xfree86 bug, and should potentially be reclassified - xdm can still connect in the new version; this is presumably because the auth code is statically linked into xdm itself. However, when it calls external programs (like xconsole or xrdb), they can't connect (since they're using xlibs). So it seems like there is something funny in xlibs, but the same something is *not* broken in xdm. I also don't know too much about how xdm does its authentication. Should it potentially be calling xauth or something to add the MIT-MAGIC-COOKIE-1 token? -Peff

