I was able to permanently (I hope) fix the problem.
After reading around, examining system files, logs and a lot of guesswork, I 
noticed that /usr/share/X11/xorg.conf.d had amdgpu configuration along a bunch 
of others but no intel. So I tried to find a sample file on the web and created 
(as root) 20-intel.conf containing:

Section "Device"
   Identifier  "Intel Graphics"
   Driver      "intel"
EndSection

rebooted, and a miracle happened! It loaded with both external monitors
working again! Lost the configuration though, but after redoing monitor
arrangement etc and rebooting again it was all good. I hope this helps
someone.

Regards,
isotope.

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You received this bug notification because you are a member of Ubuntu-X,
which is subscribed to xorg in Ubuntu.
https://bugs.launchpad.net/bugs/1635906

Title:
  Low graphics mode in multi monitor setup after upgrade to 16.10

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https://bugs.launchpad.net/ubuntu/+source/xorg/+bug/1635906/+subscriptions

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