Seems like xresprobe didn't quite do it's job. Could you run 'sudo
xresprobe radeon' and show what it gives?
** Changed in: xresprobe (Ubuntu)
Sourcepackagename: xserver-xorg-video-ati => xresprobe
Status: New => Incomplete
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ATI Rage: Unsuitable videomode autoselected
https://bugs.launchpad.net/bugs/148117
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