Dead keys are fully unusable in NEdit (or xpdf, or...) if the app in question was built with lesstif. For some time now I used to build my NEdit against OpenMotif-2.1.32-2_IST, downloaded from <http://www.ist.co.uk/DOWNLOADS/motif_download.html> (source is also available there, under the Open Group license). It works great!
Before I found the page linked above, I had been struggling with OpenMotif 2.2. Unfortunately, it proved extremely unstable, to the point that NEdit was unusable with it, and IIRC NEdit developers explicitly recommended building NEdit with motif 2.1.x.
The IST page linked above speaks about 2.2's experimental nature too. Interestingly, even 2.3 is qualified as such! Hence I'm not holding my breath. This licensing change may allow distros to distribute openmotif-2.3.x, but what I care about is 2.1.x. Distros won't pick it up because of the Open Group license, but (a) 2.1.x works for me, (b) I can look at the source if I want to. Good enough for me in this case.