Comment 5 for bug 428519

I have the same issue and have been trying to fix it for hours.
I can set the resolution for the GRUB2 menu using gfxmode=1024x768x16
I can also set the initial resolution for the kernel boot using gfxpayload=keep or gfxpayload=1024x768x16
I even see the resolution change to the desired mode for a while, however the screen remains blank until the kernel switches back to text only 80x30 mode!

After doing dmesg I see this line:
[ 12.831560] Console: switching to colour frame buffer device 80x30
I guess this is where the kernel switched back to text mode (Which is good since the gfx mode just remains blank!)
I'm running Karmic server:
Linux ubuntu 2.6.31-14-generic-pae #48-Ubuntu SMP Fri Oct 16 15:22:42 UTC 2009 i686 GNU/Linux
and
grub-pc 1.97~beta4-1ubuntu3