I also observed the problem on my desktop running Ubuntu 16.04.1 LTS
x86. lspci | grep VGA reports "02:00.0 VGA compatible controller: NVIDIA
Corporation C77 [GeForce 8300] (rev a2)". I am attaching
/var/log/Xorg.1.log, which says "NVIDIA GPU GeForce 8300 (C77) at
PCI:2:0:0 (GPU-0)". This system worked fine with the previous 304xx
package. I have worked around the problem by dropping 304xx and using
Nouveau.

** Attachment added: "Xorg log file"
   
https://bugs.launchpad.net/debian/+source/nvidia-graphics-drivers-legacy-304xx/+bug/1639180/+attachment/4773287/+files/Xorg.1.log

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https://bugs.launchpad.net/bugs/1639180

Title:
  no login possible after update to nvidia 304.132

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