I just downloaded a fresh version of the Precise Beta 2 ISO and re-
installed on my problem machine. I did the same dist-upgrade that I did
yesterday and all is well. No issues with update-initramfs.

I'd suggest that this is most likely a problem with one of the old ISOs
and this bug should be marked invalid if James agrees?

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https://bugs.launchpad.net/bugs/974765

Title:
  Drive not found since 3.2.0-21... kernel panic, unable to mount root
  fs

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