dan@bucky:~$ gzip -d -c /var/log/syslog.5.gz | grep rsync | less
Jun 18 10:00:02 bucky rsyncd[10902]: name lookup failed for xxx.xxx.xxx.xxx: Temporary failure in name resolution
Jun 18 10:00:02 bucky rsyncd[10902]: connect from UNKNOWN (xxx.xxx.xxx.xxx)
Jun 18 10:00:02 bucky rsyncd[10902]: rsync: The server is configured to refuse --iconv
Jun 18 10:00:02 bucky rsyncd[10902]: rsync error: requested action not supported (code 4) at clientserver.c(973) [sender=3.1.1]
"sender=3.1.1" implies its the bpc4 instance (bpc3 uses 2.6.something). So, the problem occurred on a CLIENT running rsync 3.1.1, with a BACKUPPC HOST running backuppc version 4 (the exact same CLIENT had no issues with backuppc version 3).
Its an old error, google has lots of references to it. Fix for above problem is to include this line in rsyncd.conf file on the client:
charset = utf-8
Google references explain it pretty well, better than I can right now. Suffice to say, this fixed my problem.
Dan