Not sure how it got to this state, but the easiest way to fix it is:
sudo apt-get --purge remove linux-image-2.6.17-{1,2}-powerpc
sudo apt-get install linux-image-2.6.17-2-powerpc
** Changed in: linux-source-2.6.15 (Ubuntu)
Status: Needs Info => Rejected
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Always running previous version of the kernel
https://launchpad.net/bugs/45969
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