So I was having the same error output. And I stumbled upon this. I was not able to get NX to successfully work and the details that it output were very similar to yours. I was trying to login with the account I had created for myself on my BackTrack 5 R3 VM and was struggling. I noticed my credentials were passing through fine and logging in and then it was hanging. I on a whim tried logging in through XM with root credentials and it magically worked....