Why does Cygwin/X report AUDIT: client 1 rejected from IP remotehost?
The problem is most likely a wrong DNS (Network name resolution). Make sure your windows host has a hostname which is valid from linux too and an IP address which linux can resolve to that hostname. If you add a line 192.168.26.1 myhost to /etc/hosts on the XDMCP server with the IP address and the hostname of your windows host the name resolution should work.