This looks like it may be an X bug.
/etc/default/console-setup ends up with the correct options:
XKBMODEL="pc105"
XKBLAYOUT="us"
XKBVARIANT="dvorak"
XKBOPTIONS="lv3:ralt_switch"
Which X gets:
(II) XINPUT: Adding extended input device "AT Translated Set 2 keyboard" (type:
KEYBOARD)
(**) Option "xkb_rules" "evdev"
(**) Option "xkb_model" "pc105"
(**) Option "xkb_layout" "us"
(**) Option "xkb_variant" "dvorak"
(**) Option "xkb_options" "lv3:ralt_switch"
** Also affects: xkeyboard-config (Ubuntu)
Importance: Undecided
Status: New
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Keyboard layout setting did not take effect in installed system
https://bugs.launchpad.net/bugs/408292
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