To remedy the above (comment 42), I did:
 * install the 2.21.0-0ubuntu1 xserver-xorg-video-intel from [1]
 * update-initramfs -u -k 3.5.0-21-generic
 * reboot
 * I dont need 'nomodeset', laptop LCD and external LCD function fine... 
generally functional X.

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[1] 
https://launchpad.net/ubuntu/raring/+source/xserver-xorg-video-intel/2:2.21.0-0ubuntu1

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https://bugs.launchpad.net/bugs/1097315

Title:
  Xorg hangs in drm_helper_connector_dpms

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