Public bug reported:

The last installation steps fails when installing grub in the MBR,
because it cannot detect the underlying grub device. Manually binding
both the /proc and /sys folder fixed it for me:

mount -t bind /proc /target/proc
mount -t bind /sys /target/sys

** Affects: ubuntu
     Importance: Undecided
         Status: New

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https://bugs.launchpad.net/bugs/707593

Title:
  Natty installation fails at update-grub step

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