Comment 14 for bug 48266

This problem still occurs even in the latest build on my oldest system ( AMD-K6 500mhz with 377mb ). The solution is to also install the linux-image-<version>-generic. This way if the server kernel does not work, the admin can use the generic kernel to correct the problem. Which in my case was to install linux-image-2.6.20-8-386 and make it the default. Without including another image to boot from make ubuntu-server useless on systems that can not boot the server kernel.

The work-a-round was to boot into rescue mode, then chroot and install the i386 kernel image, then reboot. Once the i386 kernel was booted I was able to change /boot/grub/menu.lst to boot from that kernel. After that the system boots with no issues.