There is an new version of minecraft. 1.2.4
And it seems the login sequence has been changed - the new version gets disconnected by the server as soon as it sends a Login packet.
Duh, it was the protocol version check
I've tried bumping the protocol version number and the client seems happy, haven't run into any out-of-the-ordinary issues, so I think I'll commit the bump.
Yeah, there's a new packet sent (at least) when the client starts flying in the creative mode. Need to implement that.