Thanks, setnes! Deactivating the XRDS-Simple plugin fixed my OpenId authentication problems. I’m using the author URL as my OpenId.
XRDS-Simple (the spec, not the WP plugin) was deprecated in early 2009 and was replaced with XRD 1.0:
http://hueniverse.com/misc/xrds-simple/
To fix this OpenId plugin properly, you would correct the XRDS discovery headers with the new XRD.