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I asked about this on IRC and just wanted to follow up on it, because I found a fix that works for me.
In ~/.inputrc
set enable-meta-key off
In ~/.Xdefaults (or ~/.Xresources, if you use that instead)
*VT100*eightBitInput: false
The part in ~/.inputrc was what I was missing, so that's why it seemed like what fixed everyone else's problem didn't work for me.
Related reference: http://invisible-island.net/ncurses/ncu … _meta_mode
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