It seems the problem was two fold:

There was a hidden in /lib/linux-restricted-modules/ that confused Xorg byt 
thinking it had the wrong driver version.
I ran: sudo rm /lib/linux-restricted-modules/.nvidia* and it fixed that problem.

The second problem was that GLX and Direct Rendering wouldn't load. That was 
caused by the XGL package still being installed.
I removed all XGL packages and the problem was solved.

I suggest that the update script should check for both of these
problems, as it will probably be very common for people upgrading from
Feisty to Gusty!

-- 
[Gusty] Broken Nvidia driver after upgrade to Gusty (7.10)
https://bugs.launchpad.net/bugs/138933
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