Thanks for your report.
There is an error is your config file.
The first line
GRUB_CMDLINE_LINUX_DEFAULT=""# If you change this file, run 'update-grub'
should be
# If you change this file, run 'update-grub'
Setting GRUB_CMDLINE_LINUX_DEFAULT="" is useless since it's redefined later in
the conf fine. I'm closing this report since it's not a bug in Ubuntu. Don't
hesitate to submit any new bug.
** Changed in: grub2 (Ubuntu)
Status: New => Invalid
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package linux-image-2.6.31-17-generic 2.6.31-17.54 failed to install/upgrade:
subprocess installed post-installation script returned error exit status 127
https://bugs.launchpad.net/bugs/504097
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