It looks as if I have the same problem. Lucid Lynx worked fine up to kernel upgrade 2.6.32-6 and only low resolution with 2.6.32-7.
Reinstall older CD (kernel 2.6.32-4) gives the normal resolution for my system and identical to the one for Karmic Koala.
With a more recent CD again only low resolution.
I append the failsafeX file created by the live-CD.
It looks as if I have the same problem. Lucid Lynx worked fine up to kernel upgrade 2.6.32-6 and only low resolution with 2.6.32-7.
Reinstall older CD (kernel 2.6.32-4) gives the normal resolution for my system and identical to the one for Karmic Koala.
With a more recent CD again only low resolution.
I append the failsafeX file created by the live-CD.