Thanks for your report
The error is
=====
Merging changes into the new version
Conflicts found! Please edit `/var/run/grub/menu.lst' and sort them out
manually.
The file `/var/run/grub/menu.lst.ucf-new' has a record of the failed merge of
the configuration file.
User postinst hook script [/sbin/update-grub] exited with value 3
=====
Did you select the 3 way merge to handle grub configuration files ?
** Changed in: linux (Ubuntu)
Status: New => Incomplete
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ERROR: "Could not install 'linux-image-2.6.27-7-generic'" druing atlernate
install upgrate from .iso mounted as CDROM for Xunbuntu 8.04 to Xubuntu 8.10
https://bugs.launchpad.net/bugs/302588
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