Andy: defoptions only comes into play when update-grub is run - are you doing that too? If not can you try adding it directly to the end of the kernel /vmlinuz-2.6.20-16-generic line or use similar instructions to those described on https://bugs.launchpad.net/ubuntu/+source/linux-restricted-modules-2.6.20/+bug/115700/comments/5 ?
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