The CYGWIN sshd service on Local Computer started and then stopped. Some services stop automatically if they are not in use by other services or programsThe first thing to do is to look into the sshd logs:
$ tail -10 /var/log/sshd.log /var/empty must be owned by root and not group or world-writable.The reason for this error is the fact that SYSTEM user (look upper case) is not the owner of /var/empty. The exact reason why this error happens is explained here. So the solution is simple:
$ chown SYSTEM /var/emptyEven though I went pass this issue I later realized there was no way to run desktop applications remotely using this method as explained here and here.