Confirmed your fix Ben.  Changed /usr/lib/python2.7/dist-
packages/cloudinit/CloudConfig/cc_grub_dpkg.py, removed
/var/lib/cloud/instance/sem/config-grub-dpkg, and ran cloud-init-cfg
grub-dpkg.  The cloud-init log confirmed xvda was selected and an
upgrade of grub worked.

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https://bugs.launchpad.net/bugs/1336855

Title:
  non-interactive grub updates for 12.04 break on AWS

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