I think I solved my own issue.
Looking at the htm source I notice this:

document.getElementById('_mfusion_canvas_Data').value = document.getElementById('canvas').saveToString(true);
 

...

I seem to be having a problem after the post on the server side.

Is it the recommended way to post the savetostring(true), then if I want to do some additional parsing of the data, I load a canvas using canvas.LoadPostData("key",Request.Post)?

Using the debugger I can see that the key is populated with the string.
I first tried canvas.LoadFromString(postedString)
but that was throwing an invalid type exception or something. Then I saw the LoadPostData and tried that. It's throwing a "Object reference not set to an instance of an object."

?

You should use LoadFromString(), and not LoadPostData. What are the description and call-stack details of the exception you are getting?

Stoyan