I have a similar issue with nvidia drivers where X does not start at all
and Ubuntu goes into login screen. Downgrading to 295.20 does nothing.

Is something wrong with the latest kernel, because the only way to boot is by 
using the older kernel (3.0.0+ in my case), not with the latest.
Hope it helps.

(12.04 LTS, 3.2.0-x kernel, lightdm, gnome3/unity, nvidia v295.20,
295.40)

** Tags added: nvidia

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which is subscribed to nvidia-graphics-drivers in Ubuntu.
https://bugs.launchpad.net/bugs/973096

Title:
  Nvidia driver causes xorg crash

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