Beh, after a whole bunch of tracing I determined there was no problem in xorg. The problem is actually in gnome-screensaver. Filed another bug, created a (tentative) patch. See here:
http://bugzilla.gnome.org/show_bug.cgi?id=412486 ** Changed in: xorg-server (upstream) Bugwatch: Freedesktop Bugzilla #10096 => GNOME Bug Tracker #412486 Status: Confirmed => Unknown -- Xnest: ghost mouse https://launchpad.net/bugs/84662 -- desktop-bugs mailing list desktop-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/desktop-bugs
