Lightdm does not recognize 3D acceleration with ati radeon driver (Low graphics mode error)

[RobPower]

Hi all.

I'm experiencing a problem in Ubuntu 12.04.3 LTS.

I have an ATI Radeon 9100 (r200), which supports 3D acceleration as you can verify by

$ glxinfo | grep direct
direct rendering: Yes

and is using the xserver-xorg-video-ati / xserver-xorg-video-radeon driver.

Anyway, after some upgrades time ago, lightdm started to not recognize graphics capability: when I power up the pc, I got a "The system is running in low graphics mode" error.
I tried to reconfigure the package and many other solutions I've seen around the internet, but I couldn't solve it.

The only workaround, which also justifies why I selected "lightdm" package and not "xserver-xorg-video-ati" package, was to switch logon screen from lightdm to gdm: GDM correctly recognizes the 3D ability and gives no error.

Steps to reproduce the bug:
1- Install an ATI Radeon 9100 card
2- Install Ubuntu 32bit 12.04.3 LTS (lightdm v.1.2.3-ubuntu2.3, xserver-xorg-video-radeon v1:6-14.99~git20111219.aacbd629-0ubuntu2)
3- Start the computer.

I may suggest, though I'm not so sure, it could be a regression? https://bugs.launchpad.net/ubuntu/+source/xserver-xorg-video-ati/+bug/495973

Thanks in advance,
Rob

ProblemType: Bug
DistroRelease: Ubuntu 12.04
Package: lightdm 1.2.3-0ubuntu2.3
ProcVersionSignature: Ubuntu 3.2.0-52.78-generic 3.2.48
Uname: Linux 3.2.0-52-generic i686
ApportVersion: 2.0.1-0ubuntu17.4
Architecture: i386
Date: Tue Aug 27 14:07:12 2013
MarkForUpload: True
ProcEnviron:
 LANGUAGE=it:en
 TERM=xterm
 PATH=(custom, no user)
 LANG=it_IT.UTF-8
 SHELL=/bin/bash
SourcePackage: lightdm
UpgradeStatus: No upgrade log present (probably fresh install)

[Robert Ancell (robert-ancell)]

Can you please attach /var/log/lightdm/lightdm.log after this occurs?

[RobPower (robpwr)]

Here they are. It's the complete content of /var/log/lightdm directory. Looks like the hint it's in x-0-greeter-log:

"Error writing X authority: Error opening file '/var/lib/lightdm/.Xauthority': Permission denied"

[RobPower (robpwr)]

Here is the directory listing