Have you tried setting the DPI through KDE? I'm not sure if you can do it in KDE, but you can in GNOME so I'm thinking it's possible in KDE as well.
Also, The message saying that Mandrake is using another font server might mean trouble. Use something like this instead.
Section "Files"
RgbPath "/usr/X11R6/lib/X11/rgb"
FontPath "/usr/X11R6/lib/X11/fonts/local/"
FontPath "/usr/X11R6/lib/X11/fonts/misc/"
FontPath "/usr/X11R6/lib/X11/fonts/75dpi/:unscaled"
FontPath "/usr/X11R6/lib/X11/fonts/100dpi/:unscaled"
FontPath "/usr/X11R6/lib/X11/fonts/Speedo/"
FontPath "/usr/X11R6/lib/X11/fonts/Type1/"
FontPath "/usr/X11R6/lib/X11/fonts/truetype/"
# FontPath "/usr/X11R6/lib/X11/fonts/freefont/"
FontPath "/usr/X11R6/lib/X11/fonts/75dpi/"
FontPath "/usr/X11R6/lib/X11/fonts/100dpi/"
FontPath "/usr/X11R6/lib/X11/fonts/cyrillic"
FontPath "/usr/share/fonts/corefonts"
EndSection
If none of those ideas fix the problem, I'm still here.