I experienced what I believe to be this same problem on my desktop
machine.  My desktop machine is not running on an external card, but it
is running on a RAID controller which Ubuntu seems to think is
'removable.'

In any event, I have been able to replicate this problem by installing
9.10 on a USB flash drive and then upgrading it to 10.04.  After a
significant amount of troubleshooting, I have found that things appear
to go wrong during the postinstall of the 'udisks' package.  Running
this line ('udevadm trigger --subsystem-match=block --action=change') in
udisks.postinst results in empty /proc and /sys filesystems.  Thus, the
failure of policykit-1 to install is just a symptom of /proc being
empty.

I'm still not sure whether this is a bug in udisks or possibly udev, but
I guess I'll reassign it to udisks for now.

** Package changed: policykit-1 (Ubuntu) => udisks (Ubuntu)

-- 
[MASTER] package policykit-1 0.96-1 failed to install/upgrade: 
start-stop-daemon: nothing in /proc - not mounted? when system is run from 
external card
https://bugs.launchpad.net/bugs/554718
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