Warning: Remote host denied X11 forwarding, perhaps xauth program could not be run on the server side.

X11 forwarding was disabled in /usr/local/etc/ssh_config.

root@sunny:/usr/local/etc# diff -wu  ssh_config.org ssh_config
--- ssh_config.org Fri Sep 29 17:23:17 2000
+++ ssh_config  Mon Oct 30 20:48:48 2000
@@ -33,5 +33,5 @@
 # Be paranoid by default
 Host *
        ForwardAgent no
-       ForwardX11 no
+       ForwardX11 yes
        FallBackToRsh no

Remote host denied X11 forwarding,

Thought the xauth was not reachable from the PATH:

$ which xauth
/opt/gnu/bin/xauth

ok, got it, no "xauth" found *during* compile:

debug: Requesting X11 forwarding with authentication spoofing.
debug: Remote: Client requested X11 forwarding, but the server has no xauth program.
debug: Remote: This is usually caused by "xauth" not being in PATH during compile.
Warning: Remote host denied X11 forwarding.