I confirm that the bug appears to be fixed in Linux Kernel 2.6.39

I installed the Ubuntu mainline kernel v2.6.39-oneiric and you also need
fgrlx 2:8.850 (you can use the Ubuntu-X ppa).

Tested on Lenovo Y560
Tested about 3 reboots without AC plugged in - it seams to work.

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https://bugs.launchpad.net/bugs/775950

Title:
  fixing recursive fault but reboot is needed! upon boot (always
  reproducible on battery only, but sometimes on AC too)

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