Having the same hanging issue at the Grub 1.5 stage on brand new R200
Dell servers running OpenSuse 10.3. The terminal timeout is set to 10
and we get 10 press any key to continue messages and then a full system
hang requiring a hard reboot.

If we do press any key on a connected console (using Dell's Serial Over
Lan) or locally before then end of the timeout then it boots fine so
seems to be a bug in continuing at the end of the wait time.

Removing the terminal line from /boot/grub/menu.1st seems to fix the
issue on our servers. The console in this case is sent by BMC to both
the local screen and the remote console with no timeout so works a
treat. This may only work with Dell's BMC/SOL but thought I'd mention it
in case anyone else has spent a day getting frustrated with this like we
have.

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grub failing load stage 2 when serial console --stop=[1|2]
https://bugs.launchpad.net/bugs/220336
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