Please try the device Option "DRI" "off". I would also suggest you try to start 
X using strace to see approximately how far it gets before it hangs:
 sudo strace Xorg
or
 sudo strace -o xorg.strace.log Xorg

You can also try to start it with gdb, setting breakpoints to narrow it
down.

-- 
[rv635] blank screen and hangs radeon 3650 on amd64
https://bugs.launchpad.net/bugs/254583
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