Your xorg.conf looks OK to me.
Upgrading might help, if it doesn't you can file an Ubuntu bug and hope it gets fixed.
A possible workaround is to alter your xorg.conf to make the screens far apart so that the mouse cannot cross to the other screen and then run a little program called dualscreen-mouse-utils to allow the mouse to cross between them, or you can use it to setup a keyboard shortcut to move between screens.
There is info here
on how to set it up. You will need to compile the program.