The bug tracker on bugs.archlinuxppc.org is still broken (can't submit bugs.) I'll post this here.
It seems that the openssh package was broken when it was built. The problem is that it contains hardcoded strings to the wrong xauth. This breaks X11 forwarding (to and from) unless a corrected address is inserted in the config files.
$ pacman -Qo /usr/bin/xauth /usr/bin/ssh /usr/sbin/sshd /usr/bin/xauth is owned by xorg-xauth 1.0.2-1 /usr/bin/ssh is owned by openssh 4.6p1-5 /usr/sbin/sshd is owned by openssh 4.6p1-5 $ strings /usr/bin/ssh | grep xauth
Wrong path here:
/usr/X11R6/bin/xauth xauthlocation No xauth program. %s/xauthfile Warning: No xauth data; using fake authentication data for X11 forwarding. $ strings /usr/sbin/sshd | grep xauth
and again here:
/usr/X11R6/bin/xauth xauthlocation maxauthtries No xauth program; cannot forward with spoofing.
Package needs a rebuild.