I'm seeing the same thing but only on my cherry trail device. On my NUC with haswell VNC works fine. I've excluded the DDX driver as I tried switching to modesetting with no change. Could be some change in Kodi, but that sounds weird as it works on haswell. Mesa perhaps?
I've just updated to the latest alpha build and found this too. Also on a Intel N2820 NUC.
Next LE release is expected soon. Install it when available, and report back. Thank you for your patience.
Solution is to create /storage/.config/xorg.conf with the following contents and reboot:
Section "Device"
Identifier "Intel Graphics"
Driver "modesetting"
EndSectionThis effectively changes the 2D/DDX driver from the Intel driver to the new modesetting driver. The modesetting driver is known to be a bit slower on newer GPU's, but I find that it works much better than the Intel driver on my Atom (cherry trail). Also it works with VNC 
Thank you, that fix has worked for me too.
Worked for me also, however it resulted in changing the the monitors from eDP1 to eDP-1 and HDMI1 to HDMI-1
as a result I needed to change my xrandr statements in autostart.sh
It was such as subtle change I was scratching my head why the HDMI stopped working.
The modesetting driver makes it so that VNC works without the unusable flickering. But it causes micro stuttering on video playback both in HW acceleration and SW modes on my Haswell setup and nothing in the logs to show for it. I've switched back to 2D/DDX driver since it's the lessor of the two evils.
Is there a more recent community build with an upgraded video driver that will solve both problems at once?
My extended build has an updated driver stack.