This bug is in ntpdate 4.2.6p2: https://bugs.ntp.org/show_bug.cgi?id=1709
Bug is fixed in 4.2.6p3

Test results from Debian squeeze:
root@debian:~/ntp-4.2.6p3# ntpdate -v
 6 Feb 15:43:48 ntpdate[4626]: ntpdate 4.2.6p2@1.2194-o Sun Oct 17 13:45:14
UTC 2010 (1)
 6 Feb 15:43:48 ntpdate[4626]: no servers can be used, exiting
root@debian:~/ntp-4.2.6p3# ntpdate 10.10.10.11
 6 Feb 15:44:06 ntpdate[4627]: no server suitable for synchronization found

root@debian:~/ntp-4.2.6p3# ./ntpdate/ntpdate -v
 6 Feb 15:44:20 ntpdate[4628]: ntpdate 4.2.6p3@1.2290-o Sun Feb  6 13:43:25
UTC 2011 (1)
 6 Feb 15:44:20 ntpdate[4628]: no servers can be used, exiting
root@debian:~/ntp-4.2.6p3# ./ntpdate/ntpdate 10.10.10.11
 6 Feb 17:44:36 ntpdate[4629]: step time server 10.10.10.11 offset
7203.757666 sec

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