I have a very similar issue with Nvidia driver as well. Mine is a 12.04
AMD64 machine.

The symptom is very similar. Everything worked fine until when I try to
logout (which I believe will go back to Framebuffer based lightdm) the
machine freezes.

Nouveau driver doesn't have the same problem and I think it is
blacklisted when you install the nvidia additional driver.

When I try to ping the machine, response coming up but with a extremely
high latency, which indicates that something is still running but is
using all CPU utilization.

I'm on a AMD fusion based machine with APU hence I reverted back to AMD
video. However would like to get Nvidia going as it offers way better
video decoding hardware.

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https://bugs.launchpad.net/bugs/989850

Title:
  nvidia driver causes console freeze

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