Actually its neither kdm nor nvidia bug. Its an straight out
ubuntu/upstart bug. Upstart starts KDM before the nvidia driver in the
kernel is ready is ready and X fails. Perhaps a proper fix would be an
upstart job that is installed with the binary driver and checks if
nvidia is ready and delays X start until it is.

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X server starts randomly in failsafe when starting from cold boot
https://bugs.launchpad.net/bugs/459639
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