Found it - this is when you have script hooks for the display server [1]
LightDM makes an incorrect assumption that you are running X.
[1] from /usr/share/lightdm/lightdm.conf.d/90-nvidia.conf in this case.
** Changed in: lightdm
Importance: Undecided => High
** Changed in: lightdm/1.10
Status: New => Triaged
** Changed in: lightdm
Status: New => Triaged
** Changed in: lightdm/1.10
Importance: Undecided => High
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https://bugs.launchpad.net/bugs/1305006
Title:
Crashes running display server scripts for non X servers
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