I got the exact same problem, as original stated in the bugreport.

I think there is two bugs in one, and we can't close the bug mentioned in the 
original bugreport. Because it still exists.
With fully updated Hardy and catalyst 8.7, my computer hardlock and capslock 
blinks in different speed. This only happens when using kdm, not gdm!

I have tried the mentioned scripts, but nothing helps.

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[fglrx] freezes upon Logout or Switch user [patch]
https://bugs.launchpad.net/bugs/118605
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