Comment 12 for bug 1681566

Part of the problem may be that linux-headers is installed after linux-image so there are no headers when the dkms kernel postinst script is run. From /var/log/dist-upgrade/apt-term.log:

3644 Setting up linux-image-4.10.0-19-generic (4.10.0-19.21) ...^M
3645 Running depmod.^M
3646 update-initramfs: deferring update (hook will be called later)^M
3647 Examining /etc/kernel/postinst.d.^M
3648 run-parts: executing /etc/kernel/postinst.d/apt-auto-removal 4.10.0-19-generic /boot/vmlinuz-4.10.0-19-generic^M
3649 run-parts: executing /etc/kernel/postinst.d/dkms 4.10.0-19-generic /boot/vmlinuz-4.10.0-19-generic^M
3650 run-parts: executing /etc/kernel/postinst.d/initramfs-tools 4.10.0-19-generic /boot/vmlinuz-4.10.0-19-generic^M
3651 update-initramfs: Generating /boot/initrd.img-4.10.0-19-generic^M
3652 run-parts: executing /etc/kernel/postinst.d/pm-utils 4.10.0-19-generic /boot/vmlinuz-4.10.0-19-generic^M
3653 run-parts: executing /etc/kernel/postinst.d/unattended-upgrades 4.10.0-19-generic /boot/vmlinuz-4.10.0-19-generic^M
3654 run-parts: executing /etc/kernel/postinst.d/update-notifier 4.10.0-19-generic /boot/vmlinuz-4.10.0-19-generic^M
3655 run-parts: executing /etc/kernel/postinst.d/zz-update-grub 4.10.0-19-generic /boot/vmlinuz-4.10.0-19-generic^M
3656 Generating grub configuration file ...^M
3657 Warning: Setting GRUB_TIMEOUT to a non-zero value when GRUB_HIDDEN_TIMEOUT is set is no longer supported.^M
3658 Found linux image: /boot/vmlinuz-4.10.0-19-generic^M
3659 Found initrd image: /boot/initrd.img-4.10.0-19-generic^M
3660 Found linux image: /boot/vmlinuz-4.8.0-26-generic^M
3661 Found initrd image: /boot/initrd.img-4.8.0-26-generic^M
3662 Found linux image: /boot/vmlinuz-4.8.0-22-generic^M
3663 Found initrd image: /boot/initrd.img-4.8.0-22-generic^M
3664 Found memtest86+ image: /boot/memtest86+.elf^M
3665 Found memtest86+ image: /boot/memtest86+.bin^M
3666 done^M
3667 Processing triggers for doc-base (0.10.7) ...^M
3668 Processing 16 changed doc-base files, 1 added doc-base file...^M
3669 Setting up telnet (0.17-41) ...^M
3670 Setting up account-plugin-flickr (0.13+17.04.20170314-0ubuntu1) ...^M
3671 Setting up zeitgeist-core (1.0-0ubuntu2) ...^M
3672 Setting up indicator-transfer (0.2+17.04.20170215-0ubuntu2) ...^M
3673 Removing obsolete conffile /etc/xdg/autostart/indicator-transfer.desktop ...^M
3674 Setting up guile-2.0-libs:amd64 (2.0.13+1-4) ...^M
3675 Setting up libpango-1.0-0:amd64 (1.40.4-1) ...^M
3676 Setting up libproxy1-plugin-networkmanager:amd64 (0.4.14-2) ...^M
3677 Setting up libboost-filesystem1.62.0:amd64 (1.62.0+dfsg-4) ...^M
3678 Setting up libhtml-parser-perl (3.72-3) ...^M
3679 Setting up libpython2.7:amd64 (2.7.13-2) ...^M
3680 Setting up libqt5sql5:amd64 (5.7.1+dfsg-2ubuntu4~1) ...^M
3681 Setting up ftp (0.17-34) ...^M
3682 Setting up libcgi-pm-perl (4.35-1) ...^M
3683 Setting up libboost-log1.61.0 (1.61.0+dfsg-3build1) ...^M
3684 Setting up upstart (1.13.2-0ubuntu35) ...^M
3685 Installing new version of config file /etc/upstart-xsessions ...^M
3686 Setting up linux-headers-4.10.0-19-generic (4.10.0-19.21) ...^M
3687 Examining /etc/kernel/header_postinst.d.^M
3688 run-parts: executing /etc/kernel/header_postinst.d/dkms 4.10.0-19-generic /boot/vmlinuz-4.10.0-19-generic^M