There seems to be a bug in the script which starts X font server -
 /etc/init.d/xfs. The bug reveals itself when root's umask does not give 
other users read permission (i.e. 027). More specifically, after a 
function buildfontlist() makes font directory it should

chmod a+r fonts.dir
chmod a+r fonts.scale ( if present )

Alas, it only does chmod +r, which is not enough, since man chmod reads:

If none of the letters 'ugoa' are given, the effect is as if `a' were 
given, but bits that are set in the umask are not affected.

In effect, xfs in -droppriv mode is unable to access aforementioned files 
and does not start at all. What makes thing worse is that in -daemon mode 
it still returns success regardless of what happened. So the poor novice 
who tampered with root's umask sees:

	Starting X Font Server:                               [  OK  ]

The only symptom is that X refuses to start:

	(...)
	Could not init font path element unix/:7100, removing from list!

	Fatal server error:
	could not open default font 'fixed'
	(...)

Ouch! But there is more to come.

	# xfs -droppriv
	FontCacheInitialize: hi=1048576, lo=786432, bal=70
	xfs error: Element #1 (starting at 0) of font path is bad or has a 
bad font:
	"/usr/X11R6/lib/X11/fonts/misc/"

Nothing strange, except that /usr/X11R6/lib/X11/fonts/misc/ is OK in this 
case. It's just the message that always points to element #1. Needless to 
say, this makes debugging a bit more frustrating.

In case these bugs were unreported up to date, you owe me a T-shirt.

How reproducible:
Always

Steps to Reproduce:
see description.
1. set root's umask to 027
2. add a new font file or whatever so that buildfontlist() is needed
3. run service start xfs
	

Actual Results:  see description

Expected Results:  see description

Additional info:

gosh, it is supposed to be EASY bug form. Instead of sending one email I 
had to create new account, and wade through a plethora of webpages. I know 
it is all supposed to make developers' life easier, but for god's sake, 
hadn't I been determined to report a bug I would give up ages ago.
Update: and all that to fill in simple form...