Keptiles link solved my issue:
wrong XDM_AUTH_MASK path in /etc/ati/authatieventsd.sh - should be set to 
/var/run/xauth/A$1* 

i'm running: hardy heron, ati (restricted-modules)

reference: http://ati.cchtml.com/show_bug.cgi?id=992#c26

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[hardy] logout ends in blank screen
https://bugs.launchpad.net/bugs/181343
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