As far as I know, the Radeon HD 3000 is based on the R600 chip, ergo, it 
requires the R600 microcode to work properly. My question for you is: have you 
been using this chip with KMS or without. If you have, try issuing "nomodeset" 
to kernel at boot just to make sure it is not a problem related to the 
experimental R600 code in radeon-drm.
My GPU is a RS480 (Radeon Xpress 1100), and it worked 100%, but it is based in 
the R300 microcode, and apparently only R200 - R500 chips are fully supported 
with xserver-sorg-video-ati.
My guess: you need the radeonhd driver, wnich is a work in progress. Check all 
this, please.

-- 
X fails to start up after mesa+git update - gdm loops after logging in
https://bugs.launchpad.net/bugs/419126
You received this bug notification because you are a member of Ubuntu-X,
which is subscribed to xserver-xorg-video-ati in ubuntu.

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