The XFree86-3.3.2.3-25 package does not create the directory /var/X11R6/xkb/compiled/ which is necesary for correct functioning of xkb when using xdm
Although this directory was not created by the XFree install, the compiled directory was found in /usr/X11R6/lib/X11/xkb/compiled. XDM worked properly with this setup.