Having the same issue on Ubuntu Maverick.  Xvnc cannot connect to GDM via XDMCP on localhost because of this issue.  Exact same config worked fine in Lucid.

Oct 19 10:14:32 leftovers xinetd[1385]: START: Xvnc pid=1930 from=xxx.xxx.xxx.xxx
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): GdmXdmcpDisplayFactory: decode_packet: GIOCondition 1
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): Address family:2 (inet) hostname:(null) host:(null) port:(null) local:1 loopback:1
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): Address family:2 (inet) hostname:(null) host:(null) port:(null) local:0 loopback:0
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): GdmAddress: looking up hostname: leftovers
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): family=10 sock_type=1 protocol=6 flags=0x2 canonname=leftovers#012
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): family=10 sock_type=2 protocol=17 flags=0x2 canonname=(null)#012
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): family=10 sock_type=3 protocol=0 flags=0x2 canonname=(null)#012
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=1 protocol=6 flags=0x2 canonname=(null)#012
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=2 protocol=17 flags=0x2 canonname=(null)#012
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=3 protocol=0 flags=0x2 canonname=(null)#012
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=1 protocol=6 flags=0x2 canonname=(null)#012
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=2 protocol=17 flags=0x2 canonname=(null)#012
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=3 protocol=0 flags=0x2 canonname=(null)#012
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): Address family:10 (inet6) hostname:(null) host:(null) port:(null) local:0 loopback:0
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): GdmXdmcpDisplayFactory: Received opcode QUERY from client ::ffff:ff7f:0:0%1905946208 : 43524
Oct 19 10:14:32 leftovers gdm-binary[925]: DEBUG(+): GdmXdmcpDisplayFactory: Sending WILLING to ::ffff:ff7f:0:0%1905946208
Oct 19 10:14:34 leftovers gdm-binary[925]: DEBUG(+): GdmXdmcpDisplayFactory: decode_packet: GIOCondition 1
Oct 19 10:14:34 leftovers gdm-binary[925]: DEBUG(+): Address family:10 (inet6) hostname:(null) host:(null) port:(null) local:0 loopback:0
Oct 19 10:14:34 leftovers gdm-binary[925]: DEBUG(+): GdmXdmcpDisplayFactory: Received opcode QUERY from client ::ffff:ff7f:0:0%1905946208 : 43524
Oct 19 10:14:34 leftovers gdm-binary[925]: DEBUG(+): GdmXdmcpDisplayFactory: Sending WILLING to ::ffff:ff7f:0:0%1905946208
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): GdmXdmcpDisplayFactory: decode_packet: GIOCondition 1
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): Address family:2 (inet) hostname:(null) host:(null) port:(null) local:1 loopback:1
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): Address family:2 (inet) hostname:(null) host:(null) port:(null) local:0 loopback:0
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): GdmAddress: looking up hostname: leftovers
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): family=10 sock_type=1 protocol=6 flags=0x2 canonname=leftovers#012
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): family=10 sock_type=2 protocol=17 flags=0x2 canonname=(null)#012
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): family=10 sock_type=3 protocol=0 flags=0x2 canonname=(null)#012
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=1 protocol=6 flags=0x2 canonname=(null)#012
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=2 protocol=17 flags=0x2 canonname=(null)#012
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=3 protocol=0 flags=0x2 canonname=(null)#012
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=1 protocol=6 flags=0x2 canonname=(null)#012
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=2 protocol=17 flags=0x2 canonname=(null)#012
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): family=2 sock_type=3 protocol=0 flags=0x2 canonname=(null)#012
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): Address family:10 (inet6) hostname:(null) host:(null) port:(null) local:0 loopback:0
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): GdmXdmcpDisplayFactory: Received opcode QUERY from client ::ffff:ff7f:0:0%1905946208 : 43524
Oct 19 10:14:38 leftovers gdm-binary[925]: DEBUG(+): GdmXdmcpDisplayFactory: Sending WILLING to ::ffff:ff7f:0:0%1905946208
Oct 19 10:14:39 leftovers xinetd[1385]: EXIT: Xvnc status=0 pid=1930