Kernel panic after update 2.6.32-29 because of trailing dots in /boot/initrd file

This is on Ubuntu Lucid 10.04 LTS, 32-bit version.
The problem occured after update to 2.6.32-29, but this could be a bug in grub instead.

Symptom:
- Kernel panic after update to 2.6.32-29
- 2.6.32-28 still boot fines

Setup:
- /boot on a separate partition (reiserfs)
- grub 1.98-1ubuntu10

Cause:
- file /boot/initrd.img-2.6.32-29-generic-pae appears to have 2 trailing dots (only visible from grub command-line)

Details:

Update manager installed the latest kernel, 2.6.32-29-generic-pae. After reboot, I got the following message:

[....] kernel panic - not syncing: VFS - Unable to mount root FS on unknown block

Booting 2.6.32-28 worked fine. Things tried to no avail:
- Booting 2.6.32-29 again.
- Uninstalling 2.6.32-29 headers + image (dpkg -r --force-all), and updating again.
- Reinstalling again with synaptic this time, selecting all 2.6.32-29 packages, and ask for reinstall.
- Refreshing grub menu with sudo update-grub.
- Analyse boot_info_script. Nothing special. In particular both 32-28 and 32-29 entries are pretty much the same
- Unpack & compare the content of the initrd files for 32-28 and 32-29 (looking for missing reiserfs module... but that would be really silly). Nothing special, they are exactly the same except module directory name

So I decided to go through grub command-line, and typed:
init (hd0,3)
linux /vmlinuz-2.6.32-29-generic-pae
initrd /initrd <tab> --> pressing <tab> actually returned 3 files:

initrd.img-2.6.32-29-generic-pae..
initrd.img-2.6.32-28-generic-pae
initrd.img-2.6.32-27-generic-pae

Please note the *TRAILING DOTS* on the first line.

Now if I boot normally 2.6.32-28, there are no such trailing dots on this file:
$ ls /boot
initrd.img-2.6.32-29-generic-pae
initrd.img-2.6.32-28-generic-pae
initrd.img-2.6.32-27-generic-pae

At this stage, the following workarounds work:

# Rename the initrd file into something different
$ sudo mv /boot/initrd.img-2.6.32-29-generic-pae /boot/foobar
$ sudo vi /boot/grub/grub.cfg
# Edit line
# initrd /initrd.img-2.6.32-29-generic-pae
# into
# initrd /foobar

--- OR ---

# Add the 2 trailing dots in grub.cfg
$ sudo vi /boot/grub/grub.cfg
# Edit line
# initrd /initrd.img-2.6.32-29-generic-pae
# into
# initrd /initrd.img-2.6.32-29-generic-pae..

What does *NOT* work (but is a complete mystery to me):

# Rename initrd into something and back to original name
$ cd /boot
$ sudo mv initrd.img-2.6.32-29-generic-pae foobar
$ sudo mv foobar initrd.img-2.6.32-29-generic-pae

If I do this, the 2 trailing dots are back visible in grub

ProblemType: Bug
DistroRelease: Ubuntu 10.04
Package: linux-image-2.6.32-29-generic-pae 2.6.32-29.58
Regression: Yes
Reproducible: Yes
ProcVersionSignature: Ubuntu 2.6.32-29.58-generic-pae 2.6.32.28+drm33.13
Uname: Linux 2.6.32-29-generic-pae i686
AlsaVersion: Advanced Linux Sound Architecture Driver Version 1.0.21.
Architecture: i386
ArecordDevices:
 **** List of CAPTURE Hardware Devices ****
 card 0: Intel [HDA Intel], device 0: STAC92xx Analog [STAC92xx Analog]
   Subdevices: 2/2
   Subdevice #0: subdevice #0
   Subdevice #1: subdevice #1
AudioDevicesInUse:
 USER PID ACCESS COMMAND
 /dev/snd/controlC0: beq06659 2283 F.... pulseaudio
 /dev/snd/pcmC0D0p: beq06659 2283 F...m pulseaudio
CRDA: Error: [Errno 2] No such file or directory
Card0.Amixer.info:
 Card hw:0 'Intel'/'HDA Intel at 0xf6adc000 irq 21'
   Mixer name : 'Intel G45 DEVCTG'
   Components : 'HDA:111d76b2,1028024f,00100302 HDA:80862802,80860101,00100000'
   Controls : 24
   Simple ctrls : 15
Date: Thu Mar 3 13:39:12 2011
HibernationDevice: RESUME=UUID=0cd35a3d-e99a-4a6a-ac42-372cc634a207
MachineType: Dell Inc. Latitude E6500
PccardctlIdent:
 Socket 0:
   no product info available
PccardctlStatus:
 Socket 0:
   no card
ProcCmdLine: BOOT_IMAGE=/vmlinuz-2.6.32-29-generic-pae root=UUID=4eade6b3-6a95-428d-addb-cfc53ca9bce0 ro quiet splash
ProcEnviron:
 PATH=(custom, user)
 LANG=en_US.utf8
 SHELL=/bin/bash
RelatedPackageVersions: linux-firmware 1.34.3
SourcePackage: linux
dmi.bios.date: 12/21/2009
dmi.bios.vendor: Dell Inc.
dmi.bios.version: A19
dmi.board.name: 0W612R
dmi.board.vendor: Dell Inc.
dmi.chassis.type: 8
dmi.chassis.vendor: Dell Inc.
dmi.modalias: dmi:bvnDellInc.:bvrA19:bd12/21/2009:svnDellInc.:pnLatitudeE6500:pvr:rvnDellInc.:rn0W612R:rvr:cvnDellInc.:ct8:cvr:
dmi.product.name: Latitude E6500
dmi.sys.vendor: Dell Inc.