Using torsocks with redirected display

What steps will reproduce the problem?
1. connect to remote system using ssh with enabled x-forwarding
2. execute torsocks <any x application>

What is the expected output?
Application should run on local system display using remote system tor proxy.

What do you see instead?
In case of DISPLAY=localhost:10.0
(app_name:pid): Gtk-WARNING **: cannot open display: localhost:10.0

In case of DISPLAY=127.0.0.1:10.0
libtorsocks(pid): connect: Connection is to a local address (127.0.0.1), may be a TCP DNS request to a local DNS server so have to reject to be safe. Please report a bug to http://code.google.com/p/torsocks/issues/entry if this is preventing a program from working properly with torsocks.

What version of the product are you using? On what operating system?
torsocks-1.2-1
Ubuntu 12.04 LTS
Linux ubuntu 3.2.0-27-generic #43-Ubuntu SMP Fri Jul 6 14:25:57 UTC 2012 x86_64 x86_64 x86_64 GNU/Linux