I had the same issue with a dell desktop machine containing an ATI rv610
graphics card.  If found that I could get the xserver working by going
to the console and editing the xorg.conf file to explicitly set the
driver to "radeonhd" instead of the default "radeon".  I do not know why
the radeon driver is setting the screen into standby, the xorg logfile
looks normal in both cases.

so short version, radeonhd works, radeon doesn't.

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[RV610] black screen at logon screen on 1st boot after install
https://bugs.launchpad.net/bugs/273510
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