After many, many hours of fruitless searching, I decided to comment out the rotation of the screen from the setting of display_rotate=3 . Lo and behold, I can now play games and when I exit out of them the screen is not all jacked up! :) I can even type startx and it is correct.
The odd thing is, this did work correctly when the screen was rotated, but then stopped working after I upgraded using the script.
So now my question is; is there another way to rotate the screen so the video is correct in the cabinet?