Update to 2.6.38-6 makes OS unbootable

Hi, i am trying Natty in it's latest, Alpha 3 version, it came with 2.6.38-5 kernel which gives me an error ["Sparse file not allowed - Press any key to continue..."] before grub loads, but it was easy to press the key and the ubuntu was continuing to load. Annoying but OK. BUT, after update to 2.6.38-6, three error messages appears instead of one ["Sparse file not allowed", "Couldn't find the chunk descriptor", "You need to load the kernel first - Press any key to continue"] And when I press the key, it brings me back to GRUB in a loop. It is huge problem I think which makes the ubuntu unbootable, and so it deserves some investigation.

ProblemType: Bug
DistroRelease: Ubuntu 11.04
Package: linux-image-2.6.38-6-generic 2.6.38-6.34
Regression: Yes
Reproducible: Yes
ProcVersionSignature: Ubuntu 2.6.38-5.32-generic 2.6.38-rc6
Uname: Linux 2.6.38-5-generic x86_64
AlsaVersion: Advanced Linux Sound Architecture Driver Version 1.0.23.
Architecture: amd64
ArecordDevices:
 **** List of CAPTURE Hardware Devices ****
 card 0: Intel [HDA Intel], device 0: ALC272 Analog [ALC272 Analog]
   Subdevices: 1/1
   Subdevice #0: subdevice #0
AudioDevicesInUse:
 USER PID ACCESS COMMAND
 /dev/snd/controlC0: tom 1527 F.... pulseaudio
 /dev/snd/pcmC0D0p: tom 1527 F...m pulseaudio
CRDA: Error: [Errno 2] Adresář nebo soubor neexistuje
Card0.Amixer.info:
 Card hw:0 'Intel'/'HDA Intel at 0xd9100000 irq 47'
   Mixer name : 'Realtek ALC272'
   Components : 'HDA:10ec0272,17aac004,00100001'
   Controls : 24
   Simple ctrls : 13
Card1.Amixer.info:
 Card hw:1 'NVidia'/'HDA NVidia at 0xd3000000 irq 16'
   Mixer name : 'Nvidia GPU 0a HDMI/DP'
   Components : 'HDA:10de000a,10de0101,00100100'
   Controls : 16
   Simple ctrls : 4
Date: Thu Mar 17 01:44:26 2011
HibernationDevice: RESUME=UUID=563cd50c-07aa-41f8-ae6b-72ee145449d3
InstallationMedia: Kubuntu 11.04 "Natty Narwhal" - Alpha amd64 (20110301.4)
MachineType: LENOVO 20035
ProcEnviron:
 LANGUAGE=cs_CZ
 LANG=cs_CZ.UTF-8
 LC_MESSAGES=cs_CZ.UTF-8
 SHELL=/bin/bash
ProcKernelCmdLine: BOOT_IMAGE=/@/boot/vmlinuz-2.6.38-5-generic root=UUID=f7380ff4-d087-4c01-8b52-b744181d5c74 ro rootflags=subvol=@ quiet splash vt.handoff=7
RelatedPackageVersions:
 linux-restricted-modules-2.6.38-5-generic N/A
 linux-backports-modules-2.6.38-5-generic N/A
 linux-firmware 1.48
SourcePackage: linux
UpgradeStatus: No upgrade log present (probably fresh install)
dmi.bios.date: 03/17/2010
dmi.bios.vendor: LENOVO
dmi.bios.version: 1ECN33WW(V5.07)
dmi.board.asset.tag: Base Board Asset Tag
dmi.board.name: Base Board Product Name
dmi.board.vendor: LENOVO
dmi.board.version: Base Board Version
dmi.chassis.asset.tag: Chassis Asset Tag
dmi.chassis.type: 10
dmi.chassis.vendor: Chassis Manufacturer
dmi.chassis.version: Chassis Version
dmi.modalias: dmi:bvnLENOVO:bvr1ECN33WW(V5.07):bd03/17/2010:svnLENOVO:pn20035:pvrLenovoIdeaPadY550P:rvnLENOVO:rnBaseBoardProductName:rvrBaseBoardVersion:cvnChassisManufacturer:ct10:cvrChassisVersion:
dmi.product.name: 20035
dmi.product.version: Lenovo IdeaPad Y550P
dmi.sys.vendor: LENOVO