Quoting Steve Langasek in Debian bug#392500:
"In xorg 6.9, hw/xfree86/os-support/linux/Imakefile had this:

 #if defined(AlphaArchitecture)
 SpecialObjectRule(lnx_ev56.o, lnx_ev56.c, -mcpu=ev56)
 #endif

This isn't carried over at all into 7.0 thanks to the build system reorg.

Building lnx_ev56 with the right build flags gives me a working X server
again. :)"

This patch fixes it (applies with some fuzz to the master branch):
Index: hw/xfree86/os-support/linux/Makefile.am
===================================================================
--- hw/xfree86/os-support/linux/Makefile.am	(revision 3907)
+++ hw/xfree86/os-support/linux/Makefile.am	(working copy)
@@ -4,7 +4,12 @@
 PLATFORM_PCI_SUPPORT = $(srcdir)/../shared/ia64Pci.c
 endif
 if LINUX_ALPHA
-PLATFORM_PCI_SUPPORT = lnx_ev56.c \
+noinst_LTLIBRARIES += libev56.la
+libev56_la_CFLAGS = $(AM_CFLAGS) -mcpu=ev56
+libev56_la_SOURCES = lnx_ev56.c
+liblinux_la_LIBADD = libev56.la
+liblinux_la_DEPENDENCIES = libev56.la
+PLATFORM_PCI_SUPPORT = \
        $(srcdir)/lnx_axp.c \
        $(srcdir)/../shared/xf86Axp.c
 endif