If you are going to use the initramfs-tools route, can you try putting
this in your /etc/initramfs-tools/modules and then update your initrd?

# Enable Kernel Modesetting
intel_agp
drm
i915 modeset=1

The order matters, just putting i915 modeset=1 won't load agp and drm
for me as of initramfs-tools 0.92bubuntu30.

-- 
[945G/GZ] Kubuntu: no direct rendering (KMS bug)
https://bugs.launchpad.net/bugs/377875
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