I have lo in interfaces file, /etc/init/network-interface.conf is
present, CONCURRENCY=none and latest packages for karmic are installed.
And runlevel is unkown. Only way to get this machine to start properly
is to downgrade upstart to version 0.6.3-10. As far as I can see this is
a bug. If this is the way how bugs are "fixed" in Ubuntu I think it is
time to change distribution to something that works and where bugs will
be fixed and not just marked invalid.

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upstart not starting init-scripts (event net-device-up IFACE=lo missing)
https://bugs.launchpad.net/bugs/497299
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