Hmm, alright well without an Xorg.0.log from karmic we cannot begin
troubleshooting on this problem, but beyond that, from the information
provided so far it is sounding more like a gpm issue anyway.
** Changed in: xserver-xorg-video-intel (Ubuntu)
Status: Incomplete => Invalid
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[i965gm] Closing and opening lid sometimes leads to screen ENDLESSLY BLINKING
https://bugs.launchpad.net/bugs/368946
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