Using XFree86-4.0-29, I get the following error trying to run X as a normal user (either with a 3.3.6 or a 4.0 server -- both use Xwrapper) Authentication failed - cannot start X server. Perhaps you do not have console ownership? PAM configuration for xserver looks sane to me and I've logged in as the user on the console and /dev/console is writable, so I'm not sure how the auth is failing.
Fix as suggested by Hans de Goede on testers-list is to add /etc/security/console.apps/xserver to the XFree86 rpm. This does work to fix the problem
Will be fixed in 0.30 and later builds. Thanks for the bug report!