Yes, excellent call, and much thanks for your help. This now works:

# cat /etc/fstab
proc            /proc       proc    defaults    0 0
LABEL=MYROOT  /     ext3  defaults,errors=remount-ro,noatime    0 1
UUID=b9f62618-9dff-4bb4-9f58-3c2c5a95625d  none  swap  sw          0 0

# cat /boot/grub/menu.lst 
default=0
timeout=5
 
title=DISTRO-NAME "Ubuntu 2.6.35-30-virtual"
    root (hd0)
    kernel /boot/vmlinuz-2.6.35-30-virtual ro console=hvc0 root=LABEL=MYROOT
    initrd /boot/initrd.img-2.6.35-30-virtual

# uname -a
Linux langex 2.6.35-30-virtual #56-Ubuntu SMP Mon Jul 11 23:14:32 UTC 2011 
x86_64 GNU/Linux

I believe this bug report can be closed now.

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Title:
  Lucid kernel works on Rackspace cloud server, Maverick kernel does not

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