hello christopher,

i didn't try with the ubuntu live cd, but the problem is gone now in
debian stable (xorg 7.7 / xserver-xorg-video-radeon 6.14.4).

unless someone else objects with first hand experience from ubuntu, i
think you can close this bug.

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https://bugs.launchpad.net/bugs/1037564

Title:
  RandR offers rotations, but fails to apply them

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