X won't come up on C2

[John Watlington]

We are having an impossible time getting X to come up on C2 machines.
And X takes forever to stop trying to come up when we switch to init  
level 3.

The error message spewed out on the console is:
AUDIT:  <date & time> : <pid>: X: client 1 rejected from local host  
(uid 500)
Xlib: connection to ":0.0" refused by server
Xlib: no protocol specified

These machines have no serial number, but have a reasonable time set  
(June 2007).

We are trying with build 617, and kernel 20071022.2 or .3.
The firmware is q2d01

When we switch to init level 3, the error messages continue to spew,  
and ps lists
X and xinit as still running.

Suggestions ?
wad