This is due to not hiding the cursor during mode switches. The following
patch used to hide the symptoms (not for upstream):
diff --git a/src/aticonsole.c b/src/aticonsole.c
index bd5ec9c..5de0df4 100644
--- a/src/aticonsole.c
+++ b/src/aticonsole.c
@@ -658,6 +658,12 @@ ATISwitchMode
#endif /* XF86DRI_DEVEL */
+ /* Workaround for X server hiding the cursor for core cursor, but not
+ * for Xcursor, leaving a 64x64 garbage upper-left.
+ */
+ if (pATI->pCursorInfo)
+ (*pATI->pCursorInfo->HideCursor)(pScreenInfo);
+
ATIModeSet(pScreenInfo, pATI, &pATI->NewHW);
#ifdef XF86DRI_DEVEL
--
[rage] Striped corner and mode switch failure
https://bugs.launchpad.net/bugs/82434
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