Problem: After exiting X-intel, console command line wraps around

[alupu at verizon.net]

Hello,

System: (B)LFS, i686-pc-linux-gnu, kernel-3.1.0, Udev-173, Xorg-7.6
 xorg-server-1.11.2
 xf86-video-intel-2.17.0
 xf86-input-keyboard-1.6.0 (not used - for reference)
 xf86-input-mouse-1.7.1    (not used - for reference)
 xf86-input-evdev-2.6.0
 xf86-video-vesa-2.3.0
 xterm-276
Board: "ASUS P5E-VM HDMI" with Intel G35/ICH9R
Monitor: Samsung SM2494, Wide (16:9), DVI input (HDMI->DVI cable)

SEQUENCE OF STEPS LEADING TO THE PROBLEM

1. Reboot to command line (as opposed to graphics)
2. startx ~/xterm   # go to X using the intel driver
3. exit                 # Exit X to command line
4. PROBLEM:  command line wraps around now
   (i.e., doesn't go to next line if text reaches end, as would normally happen)

COMMENTS

A. Unlike the (default) "intel" driver above, the "vesa" driver doesn't exhibit problem (4)

B. The wrap-around problem doesn't change back to normal unless/until
 B1.  At (4) one logouts and logs back in
 B2.  At (4) one types
        TERM=linux      # Strange (see C below)

C. echo $TERM -> "linux" at _all_ times (in command/text mode)

D. echo $TERM -> "xterm-color" (in X)

E. 'setterm -linewrap on|off' doesn't have any effect (like B above,
     i.e., doesn't restore system to normal)

F. The problem occurs after any of these actions:
 F1.  startx -> xterm   (as in the example above)
 F2.  startx -> fluxbox (1.3.1)
 F3.  startx -> KDE (3.5.10)

G. For completeness (and reference):
 []$ cat ~/xterm
xrdb -load $HOME/.Xresources   # '.Xresources' content not relevant here.
mwm &
exec xterm -geometry ...
 
H. Appending something like "TERM=linux" in any of the X start-up scripts
 doesn't prevent/affect the problem.

I. FWIW, I use only the "evdev" input driver in 'xorg.conf' + '10-evdev.conf'

J. The above two files, and/or 'Xorg.0.log' are available upon request.
   The 'Xorg.0.log' is fully clean (no EE's) unless I use USB
   keyboard and mouse (with the known EE "axes" bug) instead of PS2's.

K. The console (command line) display has 80 chars per line (both before
   and after going to X). 

L. The GRUB start-up line is
 kernel /boot/LFSkernel root=/dev/sda3 video=640x400M at 70m

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Is this a bug or there's a (known) fix for my problem?
I'd appreciate any help.
Thanks,
-- Alex