Hi Erez,
You should get a Mach64 server from ftp.xfree86.org (there are 2 patches in
this server which were not incorporated into most XFree distributions), in
addition you should add the following line to the device section of your
XF86Config file :
Option "no_block_write"
(I'm running the same configuration and this solved the problem for me.)
Nir