It turns out, if you wait long enough, a recovery shell is presented.

So I dumped contents of dmesg to an USB flash drive.
See the attachment. Note that it contains also messeges for plugging the USB 
drive in.

Looks like the problem is indeed with SATA devices. 
I already had  similar problem with Gentoo 2008.1 beta live-CD. Somebody there 
told me that my hardware does not have AHCI, but kernel is trying to use it.

PS: Could somebody explain why-oh-why I can only mount ntfs volumes from
the recovery shell (only mount.mtfs, mount.mtfs-3g and mount.fuse are
present)?

** Attachment added: "dmesg.txt"
   http://launchpadlibrarian.net/13981576/dmesg.txt

-- 
Cannot boot Hardy.
https://bugs.launchpad.net/bugs/223509
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