Along the same lines as Sebastian H., I solved this problem by disabling
framebuffer (specifically, by uncommenting the GRUB_TERMINAL=console
line in /etc/default/grub, and re-building the grub config).

I may try uvesafb like Sebastian did to restore framebuffer
functionality, but it's not a pressing issue for my use case.

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https://bugs.launchpad.net/bugs/1067320

Title:
  1002:6798 [fglrx] VT cursor is visible and blinking on top of Unity
  Radeon HD 7970 and 5450

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