Looking at this again main.log indicates the following:
2008-05-23 07:39:29,657 DEBUG useNetwork: 'True' (selected by user)
Are you certain that you choose No? Additionally did you have the
alternate Xubuntu CD? You might also try upgrading to Hardy and
skipping the other releases.
** Changed in: update-manager (Ubuntu)
Status: Confirmed => Incomplete
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Dapper update manager could not calculate the upgrade
https://bugs.launchpad.net/bugs/234223
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