I can reproduce this with a frech Gutsy Tribe 3 install, updated.
In addition to getting the mentioned behavior, I can't login but instead
I am brought back to the GDM login screen.
Marking as high, as this makes a default Ubuntu Gutsy installation
generally unusable.
This may also be related to the splashy-themes package, which includes
the debian-moreblue theme.
** Changed in: gdm-themes (Ubuntu)
Importance: Undecided => High
Status: New => Confirmed
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Missing theme prevents login after last two Gutsy updates
https://bugs.launchpad.net/bugs/128577
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