Hello there, I am having the same issues with the same specs.

As almost everybody else I use an AMD 64 with the amd64-version of
ubuntu, a x850XT from ATI (using fglrx driver) and version 7.04 BTW.

Tell me if you'd like some log of any kind from me.

I try to boot from grub generic boot and I get the system hang as well.
If there's any fix for this anytime soon let us all know! or at least
what I need to do to bypass it so I can turn on my system and not need
to do recovery mode every time.

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Feisty crashes after grub if usplash enabled (amd64)
https://bugs.launchpad.net/bugs/86666
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