Changing the videocard from "PCI" to "Onboard" in the BIOS works around the 
issue.
I had similar issues back in Gutsy and Fiesty or thereabouts that eventually 
got fixed in Hardy and Intrepid up until 2.6.27

-- 
The 2.6.27-2.3 kernel fails to boot
https://bugs.launchpad.net/bugs/267295
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