"su -; xterm -display rhost" -> errors

[pnews@lomarline.freeserve.co.uk]

unmae -a
CYGWIN_95-4.0 local_host 1.5.3(0.90/3/2) 2003-09-01 13:15 i586[snip]

I am trying to get xdm working but I have run into a problem
with the starting of an Xsesson.

The error can be replicated outside xdm with:
1) run "xhost +" on the remote host
2) opening a bash shell under cygwin
3) xterm -display remotehost
   The xterm opens on the remote machine.
4) close the xterm
5) su - [name]
   possible providing the "name" has no password or a known one.
6) xterm -display remotehost
   Fails with
  _X11TransSocketOpen: socket() failed for tcp
  _X11TransSocketOpenCOTSClient: Unable to open socket for tcp
  _X11TransOpen: transport open failed for tcp/remoteIP:0
  /usr/X11R6/bin/xterm Xt error: Can't open display: %s

Could some one please run this test and confirm that they
too get this error?

Does any one know what could cause it?

Here is my tupence worth: 
I have looked through the Cygwin User's Guide and think that it might
be linked to the sockets section:
[snip]
: Cygwin has to perform this initialization when appropriate. In order
: to support sockets across fork calls, child processes initialize
: Winsock if any inherited file descriptor is a socket.

As there is no socket file descriptor open for the su perhapse
the Winsock is not re-initalized on the next socket open in 
the child.  Does this make sense or am I barking up the wrong tree?

Regards Philip