grub2 menu does not include updated kernel

I have two partitions on one hard drive. Ubuntu lucid 64 bit version is installed in both partitions. I have updated from 2.6.32-25 to 2.6.32-26 in both partitions and the files are in both usr/src folders. On startup the grub2 menu does not give the option to load 2.6.32-26 in one of the partitions - it is available in the other.

ProblemType: Bug
DistroRelease: Ubuntu 10.04
Package: linux-image-2.6.32-25-generic 2.6.32-25.45
Regression: Yes
Reproducible: Yes
ProcVersionSignature: Ubuntu 2.6.32-25.45-generic 2.6.32.21+drm33.7
Uname: Linux 2.6.32-25-generic x86_64
NonfreeKernelModules: fglrx
AlsaVersion: Advanced Linux Sound Architecture Driver Version 1.0.21.
Architecture: amd64
ArecordDevices:
 **** List of CAPTURE Hardware Devices ****
 card 0: SB [HDA ATI SB], device 0: VT1708B Analog [VT1708B Analog]
   Subdevices: 2/2
   Subdevice #0: subdevice #0
   Subdevice #1: subdevice #1
AudioDevicesInUse:
 USER PID ACCESS COMMAND
 /dev/snd/controlC0: ken 1526 F.... pulseaudio
CRDA: Error: [Errno 2] No such file or directory
Card0.Amixer.info:
 Card hw:0 'SB'/'HDA ATI SB at 0xfbbf4000 irq 16'
   Mixer name : 'VIA VT1708B 8-Ch'
   Components : 'HDA:1106e721,104382ea,00100100'
   Controls : 34
   Simple ctrls : 18
Date: Thu Nov 25 15:54:15 2010
HibernationDevice: RESUME=UUID=026ba1f6-e187-4463-bf5e-f32aaf4a4323
InstallationMedia: Ubuntu 10.04.1 LTS "Lucid Lynx" - Release amd64 (20100816.1)
IwConfig:
 lo no wireless extensions.

 eth1 no wireless extensions.

 eth0 no wireless extensions.
MachineType: System manufacturer System Product Name
ProcCmdLine: BOOT_IMAGE=/boot/vmlinuz-2.6.32-25-generic root=UUID=81c02126-ed36-4dc5-bd6f-1a9d69b1ffaf ro quiet splash
ProcEnviron:
 LANG=en_GB.utf8
 SHELL=/bin/bash
RelatedPackageVersions: linux-firmware 1.34.1
RfKill:

SourcePackage: linux
dmi.bios.date: 06/26/2009
dmi.bios.vendor: American Megatrends Inc.
dmi.bios.version: 2003
dmi.board.asset.tag: To Be Filled By O.E.M.
dmi.board.name: M3A78-CM
dmi.board.vendor: ASUSTeK Computer INC.
dmi.board.version: Rev X.0x
dmi.chassis.asset.tag: Asset-1234567890
dmi.chassis.type: 3
dmi.chassis.vendor: Chassis Manufacture
dmi.chassis.version: Chassis Version
dmi.modalias: dmi:bvnAmericanMegatrendsInc.:bvr2003:bd06/26/2009:svnSystemmanufacturer:pnSystemProductName:pvrSystemVersion:rvnASUSTeKComputerINC.:rnM3A78-CM:rvrRevX.0x:cvnChassisManufacture:ct3:cvrChassisVersion:
dmi.product.name: System Product Name
dmi.product.version: System Version
dmi.sys.vendor: System manufacturer