There is only non-free for nvidia, so don't select that.
When you get the black screen/blinking cursor, can you go to tty1 and startx from there, see if it shows any clear error?
To got to tty1:
Ctrl-Alt-F1
login with live/live, then run "startx"
Also, is this an old card? Can it handle desktop effects? If not there is a way to disable those in tty1.