Newly built GTX 1060 displays artefacts after startup then X server crashes - Ubuntu 16.10 fresh install

On a newly built PC I freshly installed Ubuntu Studio 16.10. To use the GPU capabilities for gaming (the main reason I built the PC) I installed the recommended NVIDIA drivers from the repo.

Now every time the PC starts, the splash screen appears, lightdm logon prompt appears … within 10 to 30 seconds regular-ish patterns of red/green artefacts appear across screen, and the interface becomes unusable. If I manage to log on quickly I see Xorg spinning close to 100% CPU. If I do little, or quickly switch to text Console 1, I can usually ssh onto the box to check logs. If I try to use the graphic console, the box just crashes completely within a minute or two of being powered on.

  • using kernel 4.8.0-27-lowlatency - I attach bug-report
  • tried latest mainline kernel, generic (without lowlatency) - same issue (see MAINLINE bug report also attached)
  • if I revert to nouveau driver, the interface is very laggy (almost unusably so), with Xorg consuming 85% CPU on idle with no apps open
  • going back to the Live USB (installer) appears to run fine, with no lag, artefacts or crashes

The last system messages are:
NVRM: Xid (PCI:0000:01:00): 62, 1a7a(3454) 8500007d ffffff57
NVRM: Xid (PCI:0000:01:00): 32, Channel ID 00000000 intr 00044000
NVRM: os_schedule: Attempted to yield the CPU while in atomic or interrupt context
NVRM: Xid (PCI:0000:01:00): 8, Channel 00000008

All new components, reseated Graphics controller, updated UEFI / BIOS, plenty of airflow in generous case.

Motherboard: ASRock B150M Pro4S Micro ATX LGA1151 (UEFI v1.80)
Video Card: Zotac GeForce GTX 1060 3GB 3GB Mini
Processor: Intel Core i5-6500 3.2GHz Quad-Core
Memory: Crucial 8GB (2 x 4GB) DDR4-2133

nvidia-bug-report.log.gz (112 KB)
nvidia-bug-report.log.MAINLINE.gz (109 KB)

Please let me know if this is more likely to be:

  • a Hardware Fault, that I can send the newly bought GPU back to the reseller via RMA, or
  • a Configuration Issue that I can resolve by tweaking some setting

I’d appreciate it so much if someone could respond with their opinion