I had 2 problems and found this question had the closest problems to mine, so thought my solution would be helpful to others who get here, trying to fix the same problem as me. My system has Cygwin/X (xinit 1.3.4-5), and PuTTY (0.64). I managed to get to the bottom of it by setting both --listen tcp on the local startxbin and passing the path to .Xauthority to putty.
Firstly, in reference to the "PuTTY X11 proxy: unable to connect to forwarded X server: Network error: Connection refused" error, you need to make the X session listen for connections: Open a cygwin terminal and edit /usr/bin/startxwin find the line...
defaultserverargs="-multiwindow" and change it to...
defaultserverargs="-multiwindow -listen tcp" Secondly, in response to the "Authorization required, but no authorization protocol specified" error, you need to make putty use the correct xauth tokens (something strange seems to go on inside putty so xauth list locally doesn't give tokens that the forwarded connection can use by passing them in xauth add <token>, they seem to need to be set by PuTTY on connection, in order for them to work).
Find the path, in the windows domain, where your ~/.Xauthority file is by running (in cygwin terminal again)
cd ~ explorer . Check out the properties on the .Xauthority file and make a note of the Location to it (select it and press CTRL+C to put it in clipboard).
Start PuTTY as in the example above (copied from http://www.math.umn.edu/systems_guide/putty_xwin32.html)
On the 'Options controlling SSH X11 forwarding' page, you should have 'Enable X11 forwarding' checked, and 'MIT-Magic-Cookie-1' set as the protocol.
Under the 'X authority file for local display' field, click Browse and using the Location to the .Xauthority file you made a note of earlier, find the .Xauthority file. Click Open to populate the field, then go back to Session (in PuTTY configuration) and save the session. Then you can click open.
It should now allow you to connect.
