Was editing /etc/ssh/sshd_config the only change you made to enable X11? When you reboot the board do you see the changes you made saved? When enabling X11 forwarding you need to restart the SSH server with /etc/init.d/sshd restart. Make sure the lines you edit are uncommented.
What openssh version do you have? Are you using the uclibc image, eglibc image or a custom image?
You can see more information of X11 forwarding here https://wiki.archlinux.org/index.php/Secure_Shell