Você não telnet para remote_host, você telnet para localhost. Se você pudesse fazer telnet diretamente para o remote_host, não precisaria de uma porta para a frente .
telnet localhost 1527
Da página de manual do ssh:
-L [bind_address:]port:host:hostport Specifies that the given port on the local (client) host is to be forwarded to the given host and port on the remote side. This works by allocating a socket to listen to port on the local side, optionally bound to the specified bind_address. Whenever a con- nection is made to this port, the connection is forwarded over the secure channel, and a connection is made to host port hostport from the remote machine. Port forwardings can also be specified in the configuration file. IPv6 addresses can be spec- ified with an alternative syntax: [bind_address/]port/host/hostport or by enclosing the address in square brackets. Only the superuser can forward privileged ports. By default, the local port is bound in accordance with the GatewayPorts setting. However, an explicit bind_address may be used to bind the connection to a specific address. The bind_address of “localhost” indicates that the listening port be bound for local use only, while an empty address or ‘*’ indicates that the port should be available from all interfaces.