Mod_proxy65 not listen...

That configuration should work.

Start ejabberd, and you should see many PROGRESS REPORT, some should refer to proxy65. Or you may find errors.

With your configuration I get:

$ netstat -nlp | grep beam
(Not all processes could be identified, non-owned process info
 will not be shown, you would have to be root to see it all.)
tcp        0      0 0.0.0.0:5269            0.0.0.0:*               LISTEN      15395/beam.smp
tcp        0      0 0.0.0.0:5280            0.0.0.0:*               LISTEN      15395/beam.smp
tcp        0      0 127.0.0.1:7777          0.0.0.0:*               LISTEN      15395/beam.smp
tcp        0      0 0.0.0.0:5281            0.0.0.0:*               LISTEN      15395/beam.smp
tcp        0      0 127.0.0.1:5222          0.0.0.0:*               LISTEN      15395/beam.smp
tcp        0      0 127.0.0.1:58728         0.0.0.0:*               LISTEN      15395/beam.smp
tcp        0      0 0.0.0.0:4560            0.0.0.0:*               LISTEN      15395/beam.smp

and I can telnet:

$ telnet localhost 7777
Trying 127.0.0.1...
Connected to localhost.
Escape character is '^]'.
asdasdasd
Connection closed by foreign host.

In that moment, ejabberd logs this:

=INFO REPORT==== 28-Feb-2011::19:47:15 ===
I(<0.334.0>:ejabberd_listener:281) : (#Port<0.4386>) Accepted connection {{127,0,0,1},47835} -> {{127,0,0,1},7777}