Please post a full log file from starting the X server without the VideoRam directive.
Here it is (attached). An extract that I find relevant : (II) intel(0): I830CheckAvailableMemory: 440316 kB available (==) intel(0): VideoRam: 131072 KB (II) intel(0): Allocating 5472 scanlines for pixmap cache (II) intel(0): Memory allocation layout: (II) intel(0): 0x00000000-0x0001ffff: ring buffer (128 kB) (II) intel(0): 0x00020000-0x00027fff: logical 3D context (32 kB) (II) intel(0): 0x00030000-0x02127fff: front buffer (33760 kB) (II) intel(0): 0x007df000: end of stolen memory (II) intel(0): 0x02128000-0x02137fff: xaa scratch (64 kB) (II) intel(0): 0x08000000: end of aperture (II) intel(0): front buffer is not tiled (WW) intel(0): Disabling Xv because the overlay register buffer allocation failed.
Xorg.0.log.gz
Description: GNU Zip compressed data
