@mgmiller - thanks for your help.  You'll notice that /cdrom is full and
this is where update-initramfs is trying to write.  In bug 562312
padding space of 30MB was added to allow room for updating-initramfs.
I've created a Maverick task for that bug so we can get that fix added
in.  In your case you might want to try removing older kernels to free
up space.

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https://bugs.launchpad.net/bugs/691985

Title:
  lzma: Encoder error: -2147467259 is too vague and causes unhelpful
  apport-package reports

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