Fixed by editing /etc/default/acpi-support and changing SAVE_VBE_STATE
to FALSE. Probably there is conflict of this with changes in kernel or
Xorg. I think this was needed in older Kubuntu releases.

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Compaq Presario 700 hangs when resuming from suspend or hibernation (Gutsy 
Tribe 5)
https://bugs.launchpad.net/bugs/139521
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