Thanks for your report.
The relevant error is ===== Setting up dhcp3-server (3.1.2-1ubuntu7) ...
useradd: cannot open /etc/passwd
adduser: `/usr/sbin/useradd -d /var/run -g dhcpd -s /bin/false -u 116 dhcpd' returned error code 1. Exiting.
dpkg: error processing dhcp3-server (--configure):
subprocess installed post-installation script returned error exit status 1 =====
Thanks for your report.
The relevant error is
=====
Setting up dhcp3-server (3.1.2-1ubuntu7) ...
useradd: cannot open /etc/passwd
adduser: `/usr/sbin/useradd -d /var/run -g dhcpd -s /bin/false -u 116 dhcpd' returned error code 1. Exiting.
dpkg: error processing dhcp3-server (--configure):
subprocess installed post-installation script returned error exit status 1
=====