Phew, after a lot of reinstalling and testing out random things, managed
to get this to work. Things that turned out to be critical:

1. Installed nvidia-370 driver that just recently came out.
2. In GRUB boot, replaced "quiet splash" with "nomodeset" (detailed 
instructions here: http://askubuntu.com/a/38782)
3. In motherboard BIOS (SuperMicro X10DAX), disabled Intel I/O Acceleration 
Technology 
(ftp://supermicro.com/CDR-INTC-Q_1.01_for_Intel_quad_platform/Intel/LAN/v12.2/PRO1000/DOCS/SERVER/ioat.htm).
 This idea came to me based on reading 'dmesg' logs which had some failure 
prints regarding "ioatdma" driver and googling had led me to 
http://www.gossamer-threads.com/lists/linux/kernel/1638783

I am not perfectly sure if 2) was necessary, but did that since it was
mentioned in several sources.

Now, I'm able to get 3D acceleration with nvidia-370 and the system is
able to do cold boots to desktop properly. Closing this as resolved.

** Changed in: linuxmint
       Status: New => Fix Released

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https://bugs.launchpad.net/bugs/1611544

Title:
  The bundled nvidia-361 driver in Mint 18 crashes on GTX 980 Ti

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