Well, like most folks on these forums I reinstalled fresh and it fixed the problem.
For the record, this time I used the latest jailkit tarball (2.11) from the jailkit site.
One other thing I noticed that I missed last time in the setup - having the full host+domain set as the hostname in /etc/hostname. I wonder if maybe that was what broke the previos setup -- last time I only had the hostname set.
Till, just out of curiosity - what is it that requires having the whole hostname in /etc/hosts?