I had the same problem this week when I upgraded my notebook with
Karmic.

The problem was solved when I reinstalled the system, upgraded, but
before restarting, I ran the command "grub-mkconfig" as root.

Apparently the kernel version is updated, but Grub setup (initrd, etc.)
dosent.

-- 
[Karmic beta] System hangs after initramfs, md1_crypt (running)
https://bugs.launchpad.net/bugs/450620
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