After some testing it appears to be hardware related as I have
experienced some unusual behavior. After changing the /etc/default/grub
file by uncommenting the GRUB_GFXMODE=1280x1024 and adding the line set
gfxpayload=keep to the /etc/grub.d/00_header file the computer booted
with the set resolution. But only once did it boot, I can not get this
behavior to repeat and freqeuntly have trouble when booting from the
installation CD to enter the rescue mode. As a work around I have
returned all the grub files to the original states and uncommented the
GRUB_TERMINAL=console line. This will allow the computer to boot.

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https://bugs.launchpad.net/bugs/1034480

Title:
  Ubuntu Server12.04 freezes after grub menu

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