The problem is that you are using the server variant of the x86 kernel
which has PAE enabled (CONFIG_HIGHMEM64G=y), and GEM doesn't support PAE
quite yet. I see you only have 2GB of ram, you may want to consider
switching to -generic instead altough I have seen PAE support patches
that shouldn't be too far off if you want to stick with it and not use
KMS for the time being.

-- 
KMS modesetting fails
https://bugs.launchpad.net/bugs/386787
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