This applies to rxvt-2.7.10 with XIM enabled.
In init.c:426, r->TermWin.focus is initialized to 1. This means that rxvt does not initially call XSetICFocus in command.c:1048, meaning that Ctrl+Space does not initially work, at least if the window actually came up upfocused and the focus is then moved to it. (This might depend on window manager settings.)
I can think of two possible solutions at the moment:
(1) Changing init.c to initialize r->TermWin.focus with 0; this works for me (I am using FVWM SmartPlacement + Autoraise), but I do not know whether there might be side effects in other environments;
(2) forwarding *every* FocusIn event to the IM, i. e. moving the XSetICFocus call in command.c:1048 out of the outer 'if' branch.