I'm trying to implement a small rotation of my screen output, such that the entirety of the screen still fits on the output. I.e. something like this:
+---------------------------------+
|      '---..                     |
|     /      ''---..              |
|    /              ''---..       |
|   /                      ''---..|
|  /                            / |
| /                            /  |
|''--..                       /   |
|      ''--..                /    |
|            ''--..         /     |
|                  ''--..  /      |
|                        ''       |
+---------------------------------+
Where the outer box represents the real output, e.g. 1920x1080px, and the inner box represent a 10 degree rotated virtual screen of 1482x834px. Rotation and size of the inner virtual screen is such that after rotation, the corners of the virtual screen just touch the outer border.

This should be (is) possible with the --transform option to xranr. Incidentally the rotation example given in the man-page does something completely different:
+---------------------------------+
|'---..                           |
|      ''---..                    |
|             ''---..             |
|                    ''---..      |
|                           ''---.|
|                               / |
|                              /  |
|                             /   |
|                            /    |
|                           /     |
|                          /      |
+---------------------------------+
I.e. it rotates the screen around the origin (0,0), and the final result does not fit the output; a large part of the virtual screen is hidden outside of view.

The correct way to rotate a screen is to first translate, then do the rotation, and finally translate back. This does still not solve the problem of parts of the virtual screen being cut off and 'hidden' outside borders of the output. For this an additional scaling is required. Quite counter intuitively this scaling must not be done using the --transform (or --scale) option, but rather by specifying a smaller virtual screen size (using the --fb option).

Putting all of this together, the following command will rotate & scale a 1920x1080 virtual screen by 10 degrees, so that the rotated and scaled virtual screen still fits the 1920x1080 output:
/usr/bin/xrandr --output LVDS1 --fb 1482x834 --transform 0.984808,0.173648,-298.19,-0.173648,0.984808,52.906,0,0,1



The problem now is that after issuing the above command, my mouse cursor disappears entirely. I can see that the mouse still works because I can click on things and see e.g. mouse-over effects triggering, but the mouse cursor itself is completely invisible.

--------------------------------------------------------

Software versions:
xorg-server 1.18.3
xrandr 1.4.3
libXcursor 1.1.14
xf86-video-intel 2.99.917_p20160704
Kernel 4.7.0-rc5

I am using the 'whiteglass' cursor theme.