I 'm having a similar issue with a Radeon 4650.

I've tried the -preposed kernel 2.6.38-9.43 and on most boots still end
up stuck at the Ubuntu boot splash screen. Does this kernel have the
above fix or should I open up a new bug report?

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https://bugs.launchpad.net/bugs/728923

Title:
  [Natty] WARNING: at
  /build/buildd/linux-2.6.38/drivers/gpu/drm/radeon/radeon_fence.c:248
  radeon_fence_wait+0x36f/0x3e0 [radeon]()

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