The issue is that Grub2.00 is not recognizing the target.  The error message is:
"error:  couldn't find suitable memory target."

grub-core/lib/relocator.c
1410 #ifdef GRUB_MACHINE_EFI
1411     grub_efi_mmap_iterate (hook, avoid_efi_boot_services);
1412 #elif defined (__powerpc__)
1413     (void) avoid_efi_boot_services;
1414     grub_machine_mmap_iterate (hook);
1415 #else
1416     (void) avoid_efi_boot_services;
1417     grub_mmap_iterate (hook);
1418 #endif
1419     if (!found)
1420       return grub_error (GRUB_ERR_BAD_OS, "couldn't find suitable memory 
target");
1421   }
1422   while (1)

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https://bugs.launchpad.net/bugs/1055686

Title:
  Ubuntu 12.10 cloud images do not full provision on Azure

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