This was an issue for me, too.  If you're using a proxy, like apt-cacher-ng, 
you can't download the gpg files and the upgrade fails early.  See this thread:
http://ubuntuforums.org/showthread.php?t=436018

Easy to reproduce.

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[Hardy] do-release-upgrade doesn't retrieve hardy gpg key
https://bugs.launchpad.net/bugs/215694
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