As it turns out the buggy package is for sure the gnome-settings-daemon.
I wasn't able to make the broken install work properly by downloading a
deb with a different version, but I was able to break an install and the
BETA LiveCD simply by updating this package.

Further, another clean install of the beta and then version locking the
gnome-settings-daemon kept it alive even after all other updates were
applied.

I'm guessing I should file a new bug report on this package.

Thanks for all the help and advice.

-- 
[RV350] Desktop corruption – Screen only shows vertical bands
https://bugs.launchpad.net/bugs/643118
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