This worked for me out of the chute (for the most part). I did need to make one small adjustment in Hibernate code but that should only affect schema export, not the actual runtime.

There were some minor differences between my test and your case:

1. I used an explicit @Convert. Could you quickly try that in your code to see if that makes a difference? Maybe the problem is the in deciding whether to apply the converter (although your Stacktrace.txt does seem to indicate that the converter was applied)
2. I am using HEAD of Hibernate's upstream master branch (essentially the same atm as HEAD of its 4.3 branch). I don't recall any changes between Final and HEAD that would have affected this, but you never know; maybe build Hibernate from source and see if that makes a difference?
3. I did not pull in joda-time-hibernate as a dependency, just joda-time itself. Maybe joda-time-hibernate does something with Hibernate here?