Ok, seems that the problem is somewhere in the radeon driver in the
kernel as installing a 3.2 kernel would boot with usable graphics.
Though frankly that is still X guys kinda domain to me.

** Attachment added: "dmesg from 3.2 (12.04 kernel)"
   
https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-video-ati/+bug/1029582/+attachment/3337979/+files/dmesg.p

** Package changed: xserver-xorg-video-ati (Ubuntu) => linux (Ubuntu)

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https://bugs.launchpad.net/bugs/1029582

Title:
  Unusable graphics with ATI RS690M

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