I got it working!!!!!!!!!!! The weirdest thing happened. My home directory somehow got changed to being owned by root and not by the owner. Therefore, the user had no write access and couldn't create that .gconf-test-locking-file and you can also see why .Xauthority bitched....I had no write access. Which also explains why I got no error logs.
Now I would LOVE an explanation as to how the heck this happened! This seemed to happened after I played with opening up another X display (startx -- :1). Very weird. Anyone got any ideas?