Comment 1 for bug 523543

OK, I've determined that the problem was indeed the partition size. I did another clean install, but this time set the size of the root partition to a more manageable 50GB, and -- although the system insisted on leaving the booted system at a non-existent vt7 prompt (server install generally means no gdm/X), the machine booted fine, and I was able to login in and do stuff after using <Ctrl>-<Alt>-<F1> to get to console running getty. Note that the second installation was step-by-step identical to the first on exactly the same hardware with exactly the same number of partitions. The only difference was / = 3TB (grub-install appears to fail) vs. / = 50GB (grub2 just works).

Not sure if anyone cares about this, but there likely will be other Ubuntu server users trying to use large root partitions who will be stymied by this.