I am also having this issue in JBOSS 4.0.3SP1 and Eclipse 3.2.2 and would like to see a response.
When we make a change to an application deployed to JBOSS (as an exploded .WAR) and touch the web.xml file, JBOSS notices the change and redeploys the application. However, Log4J shuts down and never restarts.
This behavior occurs whether JBOSS is launched from inside Eclipse, or outside.
I had the same problem with Tomcat 5.5 running inside Eclipse. So it is not a JBoss specific problem. I think I remember it was some bug in Log4j. So I switched and used the built in java jdk logging: java.util.logging.
We discovered the problem we were having (I work with msavoy). We use the Spring framework in our application. We removed Spring's Log4j listener (org.springframework.web.util.Log4jConfigListener) from the web.xml file in our WEB-INF directory. In the same file we also removed log4jConfigLocation from the context parameters.