Garbled DISPLAY variable set from within xdm for the
Xsession script.
This happens if pam_env.conf has
defined REMOTEHOST and DISPLAY.

XFree86-devel-3.3.6-11
pam-0.68-7

Running modified Redhat 6.1 System

#
# First, some special variables
#
# Set the REMOTEHOST variable for any hosts that are remote, default
# to "localhost" rather than not being set at all
REMOTEHOST      DEFAULT=localhost OVERRIDE=@{PAM_RHOST}
#
# Set the DISPLAY variable if it seems reasonable
DISPLAY         DEFAULT=${REMOTEHOST}:0.0 OVERRIDE=${DISPLAY}
#
#