Brief Background:
A=RH6.2, B=RH7.1 (physically secure network)
NIS server on A providing passwd database to B. A & B use shadow.
/home on B provided by NFS from A (rw,no_root_squash).

Problem:
I can login on a terminal on B as a user listed in NIS DB with no problem. But when I try to log in to xdm locally on B... no dice. Message log shows:

Jul 5 02:46:22 martin gdm[22913]: Couldn't authenticate gregg
Jul 5 02:48:18 martin gdm(pam_unix)[22913]: check pass; user unknown
Jul 5 02:48:18 martin gdm(pam_unix)[22913]: authentication failure; logname= uid=0 euid=0 tty=:0 ruser= rhost=

I have gone so far as to make the /etc/pam.d files for gdm and login identical and still no dice. I think the problem lies in gdm running as root and authenticating the user from a root process, but after too many hours at this, I am out of ideas. Any insight would be appreciated.