Comment 14 for bug 703009

Workaround: boot again from installer/live medium, mount all partitions, do the usual mount --bind for /proc /dev /sys and chroot. From within there, grub-install succeeded. However, there was no grub.cfg saved, so you only get a plain grub commandline and have to specify linux/initrd to boot. To get the grub.cfg, call update-grub.