Comment 14 for bug 59792

>> Did you do the new feature on apt-get that removes unnecessary packages? If so, it seems it might have removed upstart.. this was another bug recently posted.
Make sure you have upstart package on your system to init the new kernels. You can use a livecd and chroot your filesystem if you are not able to currently do anything. <<

I can confirm this. I had the same error and my menu.lst was set up fine. It was caused by an apt-get autoremove. Mounting a Ubuntu-livcd, doing chroot, and doing an apt-get install ubuntu-minimal solved the problem (apt-get install upstart was not enough!)