I’ve been having trouble with xterm since version 201. Those of you that follow xterm in portage noticed 201, and 202 both in the tree, and then 202 (or basically everything above 200) got masked because of severe issues all around. Well, as of an hour or so ago, xterm-204 is now officially in portage (having gotten released by Thomas Dickey yesterday).
It works for me!! So I’ve left it in package mask, because I need people to test and report. Either leave me a comment or file me a bug or something.