Comment 15 for bug 267185

Before I forward this upstream, one thing to check. You mentioned having tried with -fglrx; there is a known issue where leftover bits of fglrx can interfere with -ati and cause it to fail, with symptoms not unlike what's described in this bug report.

Can you please follow the steps at https://wiki.ubuntu.com/X/Troubleshooting/FglrxInteferesWithRadeonDriver, see if the issue still exists, and report your findings here?