Yes same situation - freshly update gutsy from 8.10.2007

I figured out: starting and then killing X helps.

that would be the following sequence:
# sudo /etc/init.d/gdm top
# X
(ctrl+alt+backspace)

When starting X the mouse cursor is corrupted in a similar way the
letters on the console are: Instead of an >< (X) i have something like
<> (cut in half vertically and swapped left and right).

regards
roland lezuo

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console font corruption when gdm stopped
https://bugs.launchpad.net/bugs/42715
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