this is not really a direct response since your question is long ago, but I've got the same problem with SuSE 10.0.:
rexec hangs directly after entering the password for the account of the remote host.
I've got also an error, if I tried to open a X window from the remote host on my local one:
Can't open display
But the environment variable DISPLAY was set correctly like:
$ echo $DISPLAY
and the RSA-based host authentication key was configured like:
$ xauth list
my.local.host:0 MIT-MAGIC-COOKIE-1 52bff0d2df3bcb22eebc83d7428d193d
Both problems where caused by the SuSE Firewall, since it was configured very strictly and dropping every incoming packet from remote host. You can check this by tracing the firewall log file in parallel to the above requests. If you get any -DROP- message like the following with the SRC address of your remote host and the DST address of your local host:
$ tail -f /var/log/firewall
Mar 14 15:52:58 my_local_host kernel: SFW2-INext-DROP-DEFLT IN=eth0 OUT= MAC=00:0b:bd:ac:92:9b:00:d0:95:dd:09:32:08:00 SRC=184.108.40.206 DST=220.127.116.11 LEN=48 TOS=0x00 PREC=0x00 TTL=59 ID=50390 DF PROTO=TCP SPT=59740 DPT=6000 WINDOW=24820 RES=0x00 SYN URGP=0 OPT (01010402020405B4)
Now you are close to the problem, because firewall informs you that he has dropped a TCP packet.
Try to configure the firewall with YaST. At first switch it off and try again to enter the rexec command. It should work properly. Now configure the interface (ethernet id) either as internal, if your host is part of an internal protected network, or open the dedicated DPT port (i.e. 6000) to allow remote requests.
Some words about security:
rexec is insecure, you should use ssh instead of. Even the creation of a remote X window is more easily and secure. In my certain circumstances the local machine is part of a internal network, protected by some firewall and proxy servers. Even there are some hosts in the local network with a stone age kernel installation, don't understanding ssh. Therefore I used the above solution.
So have luck and take care