Comment 36 for bug 434799

p.s.
I was able to connect to other servers and tunnel X11 to them, at the same time as I was experiencing this issue with lucid.

$ grep -i family /etc/ssh/sshd_config
$

$ grep 127 /etc/hosts
127.0.0.1 localhost
127.0.1.1 ubuntu

$ ifconfig lo
lo Link encap:Local Loopback
          inet addr:127.0.0.1 Mask:255.0.0.0
          UP LOOPBACK RUNNING MTU:16436 Metric:1
          RX packets:297 errors:0 dropped:0 overruns:0 frame:0
          TX packets:297 errors:0 dropped:0 overruns:0 carrier:0
          collisions:0 txqueuelen:0
          RX bytes:80576 (80.5 KB) TX bytes:80576 (80.5 KB)