Waterloo,
I am having the same problem in Gentoo. I am not sure if it's not a Gentoo
thing because my netbook runing Ubuntu is fine. It does have an older version
of auctex though (11.84 instead of 11.85).
However, I found commenting out:
%\usepackage{hyperref}
or disabling it via:
\usepackage[draft]{hyperref}
fixes the problem.
Hope this works for you too.
--M
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