scrub my comment #11. i have NOT tested the new driver - the build in
the graphics-drivers ppa doesn't insmod on 16.04 with kernel 4.4 and my
system fell back to nouveau without me realising. i will test again when
a working build is available.

as for switching to nvidia-304 (instead of -updates), this did not
resolve the problem for me.

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https://bugs.launchpad.net/bugs/1579501

Title:
  graphics distorted, lightdm restarting

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