As an experiment, I'd place an xset q >> some-file.txt right after every xset command you have there in your script, to see if something resets the xset settings on a later stage or if it simply can't do the setting. I remember trying something like this about two years ago, don't remember the results though.
Having the same problem, I've been using the x0vnc4server, it could possibly fiddle with xset settings now when I think of it.