I tried changing the local to the basic "C" locale and got exactly the same result (just changing environment variables). My screen is only 1024x600 if that makes a difference (but fonts onscreen always display correctly so seems unlikely that would be a factor).
Possibly the locale might be relevant here:
LANG=en_AU.UTF-8 en_AU.UTF- 8 en_AU.UTF- 8
GDM_LANG=
XTERM_LOCALE=
I tried changing the local to the basic "C" locale and got exactly the same result (just changing environment variables). My screen is only 1024x600 if that makes a difference (but fonts onscreen always display correctly so seems unlikely that would be a factor).