After I upgraded xorg-server to 1.7.6 (latest Gentoo stable), I experienced that my displays resolution was always set to 96x96 instead of real 130x130 (and my fonts ended up being really small). My previous version, 1.6.5 worked just fine.
I have tried this with intel-driver 2.9 and 2.11, 2.9 with and without KMS. 2.9 without KMS worked fine with xorg 1.6.5.
Xdpyinfo | grep resolution says
However, xrandr says
Screen 0: minimum 320 x 200, current 1680 x 1050, maximum 4096 x 4096
VGA1 disconnected (normal left inverted right x axis y axis)
LVDS1 connected 1680x1050+0+0 (normal left inverted right x axis y axis) 331mm x 207mm
1680x1050 60.1*+ 50.1
800x600 60.3 56.2
TV1 disconnected (normal left inverted right x axis y axis)
..so it's as if the driver detects LVDS properties correctly but they are not set for the *screen*.
I tried without xorg.conf and a xorg.conf where Monitor section has DisplaySize defined - no effect.
Right now I'm using xrandr --dpi 130 in my .xinitrc as a workaround and it works properly (xdpyinfo lists correct resolution and fonts are ok).
Nothing to do with libXfont...
*** This bug has been marked as a duplicate of bug 23705 ***