If sshd cannot make the connection specified by your LocalForward, you connection to the local port will immediately be closed. Your sshd is misbehaving if it does not do that.
Here's what happens for me:
Terminal 1:
dennis@lightning:~$ ssh -L 1111:localhost:1112 camel
Last login: Tue Jan 29 00:05:28 2013 from lightning.home.kaarsemaker.net
[dkaarsemaker@camel ~]$ channel 3: open failed: connect failed: Connection refused
channel 3: open failed: connect failed: Connection refused
The error messages are printed whenever I try to connect in terminal 2.
Terminal 2:
dennis@lightning:~$ telnet localhost 1111
Trying 127.0.0.1...
Connected to localhost.
Escape character is '^]'.
Connection closed by foreign host.
And I see I read the question wrong, as you use a RemoteForward. Though that has a similar result for me, immediate disconnect:
dennis@lightning:~$ ssh -R 1111:localhost:1112 camel.ams6.corp.booking.com
Last login: Sun Feb 3 11:43:07 2013 from lightning.home.kaarsemaker.net
[dkaarsemaker@camel ~]$ telnet localhost 1111
Trying 127.0.0.1...
connect_to localhost port 1112: failed.
Connected to localhost.localdomain (127.0.0.1).
Escape character is '^]'.
Connection closed by foreign host.