Close laptop lid and X resets (power managment set to do nothing. Only in Edgy)

Binary package hint: gdm

I'm running Edgy on a Dell C810 with the ATI and the R128 driver.
There is no error message to speak of however everytime I close the screen X resets with the same Message as when I perform an x reset with ctrl+alt+bkspc.

This error did not occur in any version until now. Ubuntu has been on here since Breezy

All power management is set do nothing when screen closes. Logs included below.

Syslog
Oct 28 11:13:46 localhost gnome-power-manager: (bryce) Doing nothing because the lid has been closed on ac power
Oct 28 11:13:49 localhost kernel: [17239656.524000] video bus notify
Oct 28 11:14:00 localhost gdm[19053]: Error reinitilizing server
Oct 28 11:14:12 localhost gdm[19347]: Couldn't authenticate user
Oct 28 11:17:02 localhost /USR/SBIN/CRON[19871]: (root) CMD ( run-parts --report /etc/cron.hourly)

daemon.log (that's from 11:13 till last entry)
Oct 28 11:13:06 localhost gdm[19053]: Couldn't authenticate user
Oct 28 11:13:12 localhost gdm[19053]: Couldn't authenticate user
Oct 28 11:14:00 localhost gdm[19053]: Error reinitilizing server
Oct 28 11:14:12 localhost gdm[19347]: Couldn't authenticate user

auth.log
Oct 28 11:12:52 localhost gdm[16948]: (pam_unix) session closed for user bryce
Oct 28 11:13:03 localhost gdm[19053]: (pam_unix) authentication failure; logname= uid=0 euid=0 tty=:0 ruser= rhost= user=bryce
Oct 28 11:13:09 localhost gdm[19053]: (pam_unix) authentication failure; logname= uid=0 euid=0 tty=:0 ruser= rhost= user=bryce
Oct 28 11:13:16 localhost gdm[19053]: (pam_unix) session opened for user bryce by (uid=0)
Oct 28 11:14:00 localhost gdm[19053]: (pam_unix) session closed for user bryce
Oct 28 11:14:09 localhost gdm[19347]: (pam_unix) authentication failure; logname= uid=0 euid=0 tty=:0 ruser= rhost= user=bryce
Oct 28 11:14:16 localhost gdm[19347]: (pam_unix) session opened for user bryce by (uid=0)

Kern.log
Oct 28 11:13:46 localhost kernel: [17239652.876000] video bus notify
Oct 28 11:13:49 localhost kernel: [17239656.524000] video bus notify

If you need any clarification or clearer/cleaner logs feel free to give me instructions and I'll help out as best I can.