So, Bruno, could you periodically check:
ftp://mirrors.sunsite.dk/pub/cygwin/release/X11/xorg-x11-fscl/
wait until the file xorg-x11-fscl-6.8.1.0-2.tar.bz2 shows
today's date, and then try your test case again to see if it
hangs? I think that setup.exe should do the right thing and
download the changed files but, if it doesn't, you'll have to
delete them from your disk.
As far as handles are concerned, I don't think that there is any upper
limit on the number that can be allocated. The only limitation is 32
bits and the amount of available memory. It seems like people are
hitting this limit if they allow setup to run long enough.
cgf