It would be far simpler to add this line to /etc/default/grub:

GRUB_GFXPAYLOAD_LINUX=text

Doing that is fine to get things going again for you - it would be good
if you could be available to revert that once the kernel folks have a
candidate fix to test, though.

-- 
[ATI] GPU lockup with gfxpayload=keep
https://bugs.launchpad.net/bugs/605614
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