Follow-up Comment #4, bug #15288 (project grub): I got the "Error 27: Unrecognized command" too with 0.96. After installing 0.97 it was o.k. Try to remove the 0.96 grub completely and create a new mbr with a 0.97 grub-install. I'm not a grub developer but a grub user, so maybe you have hit another bug too.
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