Seems to be working OK now with nvidia-367 and xserver-xorg-legacy:

nvidia-367:
  Installed: 367.57-0ubuntu0.16.04.1
  Candidate: 367.57-0ubuntu0.16.04.1
  Version table:
 *** 367.57-0ubuntu0.16.04.1 500
        500 http://za.archive.ubuntu.com/ubuntu xenial-updates/restricted amd64 
Packages
        500 http://za.archive.ubuntu.com/ubuntu xenial-security/restricted 
amd64 Packages
        100 /var/lib/dpkg/status

xserver-xorg-legacy:
  Installed: 2:1.18.4-0ubuntu0.2
  Candidate: 2:1.18.4-0ubuntu0.2
  Version table:
 *** 2:1.18.4-0ubuntu0.2 500
        500 http://za.archive.ubuntu.com/ubuntu xenial-updates/main amd64 
Packages
        100 /var/lib/dpkg/status
     2:1.18.3-1ubuntu2 500
        500 http://za.archive.ubuntu.com/ubuntu xenial/main amd64 Packages

Perhaps Xenial milestone can be updated to Fix Released.

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https://bugs.launchpad.net/bugs/1559576

Title:
  Ubuntu GNOME boots to black screen when using proprietary Nvidia
  drivers

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