I have been having problems with MPD not being able to listen to my icecast mpd stream that I create on my home server. The problem started to exist in 0.12.2, and I found the way to fix it.

MPD only says “invalid vorbis header” when trying to play the stream, but the problem is really that MPD not yet supports chunked mode HTTP encoding. To get around this, get a source code version of mpd, change line 468 in  inputStream_http.c to read HTTP/1.0 instead of HTTP/1.1.

Compile and install!