It's because there is a space at line 9
GRUB_CMDLINE_LINUX_DEFAULT= ""
should be
GRUB_CMDLINE_LINUX_DEFAULT=""
Closing this report because it's not a Ubuntu bug. Thanks.
** Changed in: grub2 (Ubuntu)
Status: Incomplete => Invalid
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package linux-image-2.6.31-20-generic 2.6.31-20.58 failed to install/upgrade:
exit status 127 - /etc/default/grub: 9: : Permission denied
https://bugs.launchpad.net/bugs/540377
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