1) xrandr --newmode 640x350 17.50 640 664 720 800 350 353 363 366 -hsync +vsync
2) xrandr --addmode LVDS 640x350
3) xrandr --output LDVS --mode 640x350
This should work fine but causes a bad mode to be programmed. I'll need to look into what the calculated hdisplay etc. variables are in this case and fix them up, or disallow lowres modes in full_aspect mode completely if the hardware doesn't support it.
Turns out this is a DUP of the letterbox bug.
*** This bug has been marked as a duplicate of bug 15559 ***