Having the same issue on a 12.04 laptop. I have a synergy client set to
start up with the system; the behavior only appears while the machine is
connected to the (Win7) synergy server. I can't seem to find a
particular action that causes it either; and killing the synergy server
(forcing the client to disconnect) doesn't stop the problem once it's
started. Even killing gnome-settings-daemon doesn't fix it; it respawns
seconds later and continues killing my CPU. Only fix I've found is to
completely log out.

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https://bugs.launchpad.net/bugs/969359

Title:
  [keyboard]: gnome-settings-daemon consumes 100% cpu (and blinking
  numlock)

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