With updates the system is fully fuctional. 
ii  gdm                               2.29.92-0ubuntu9 
ii  kdm                               4:4.4.1-0ubuntu7
I should reconfigure to set GDM as default (now I boot with KDM). News will 
follow.

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lucid lynx - login screen stuck in a loop - SYSTEM BROKEN
https://bugs.launchpad.net/bugs/516520
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