I have the exact same issue that Saša Teković reports with the same
error message.  I purged gdm and then I reinstalled gdm and strangely
enough now it gives me a choice between kde and xterm at the login
screen.  Before the purge it was not giving me any choice for a desktop
environment.

So, any help here would be appreciated.

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lucid lynx - login screen stuck in a loop
https://bugs.launchpad.net/bugs/516520
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