Yes I do have the export:

# grep PULSE_I /etc/init.d/alsa-utils
export PULSE_INTERNAL=0

Even with /etc/hosts line shutdown still hangs on a text screen with a blinking cursor at the top left.

I looked at the logs and it looks like during boot there are some issues with the kernel I didn't see with 8.04.

Nov 30 11:12:47 pc kernel: [   36.653066] Pid: 4750, comm: hald-probe-seri Not tainted 2.6.27-9-generic #1
Nov 30 11:12:47 pc kernel: [   36.653074]  [<c037c4b6>] ? printk+0x1d/0x1f
Nov 30 11:12:47 pc kernel: [   36.653097]  [<c01781bc>] __report_bad_irq+0x2c/0xa0
Nov 30 11:12:47 pc kernel: [   36.653113]  [<c0178344>] note_interrupt+0x114/0x140
Nov 30 11:12:47 pc kernel: [   36.653122]  [<c01770b1>] ? handle_IRQ_event+0x41/0x80
Nov 30 11:12:47 pc kernel: [   36.653131]  [<c0178d93>] handle_level_irq+0xd3/0x100
Nov 30 11:12:47 pc kernel: [   36.653139]  [<c0152074>] ? tick_periodic+0x34/0x80
Nov 30 11:12:47 pc kernel: [   36.653148]  [<c01520de>] ? tick_handle_periodic+0x1e/0x80
Nov 30 11:12:47 pc kernel: [   36.653155]  [<c0106c15>] do_IRQ+0x45/0x80
Nov 30 11:12:47 pc kernel: [   36.653166]  [<c0137898>] ? irq_exit+0x8/0x90
Nov 30 11:12:47 pc kernel: [   36.653176]  [<c0113f8d>] ? smp_apic_timer_interrupt+0x5d/0x90
Nov 30 11:12:47 pc kernel: [   36.653191]  [<c0105003>] common_interrupt+0x23/0x30
Nov 30 11:12:47 pc kernel: [   36.653199]  [<c013765a>] ? __do_softirq+0x6a/0x120
Nov 30 11:12:47 pc kernel: [   36.653207]  [<c013776d>] do_softirq+0x5d/0x60
Nov 30 11:12:47 pc kernel: [   36.653213]  [<c01378e5>] irq_exit+0x55/0x90
Nov 30 11:12:47 pc kernel: [   36.653219]  [<c0106c1a>] do_IRQ+0x4a/0x80
Nov 30 11:12:47 pc kernel: [   36.653226]  [<c0105003>] common_interrupt+0x23/0x30
Nov 30 11:12:47 pc kernel: [   36.653233]  [<c037e762>] ? _spin_unlock_irqrestore+0x22/0x40
Nov 30 11:12:47 pc kernel: [   36.653243]  [<c02bf0a0>] serial8250_startup+0x200/0x700
Nov 30 11:12:47 pc kernel: [   36.653257]  [<c02b9fca>] uart_startup+0x4a/0x140
Nov 30 11:12:47 pc kernel: [   36.653265]  [<c02baa43>] uart_open+0xb3/0x1c0
Nov 30 11:12:47 pc kernel: [   36.653272]  [<c02ba990>] ? uart_open+0x0/0x1c0
Nov 30 11:12:47 pc kernel: [   36.653279]  [<c02a343c>] __tty_open+0x15c/0x340
Nov 30 11:12:47 pc kernel: [   36.653292]  [<c02a3644>] tty_open+0x24/0x40
Nov 30 11:12:47 pc kernel: [   36.653299]  [<c01b4d95>] chrdev_open+0xd5/0x1b0
Nov 30 11:12:47 pc kernel: [   36.653311]  [<c01b01fc>] __dentry_open+0xbc/0x260
Nov 30 11:12:47 pc kernel: [   36.653318]  [<c01b0477>] nameidata_to_filp+0x47/0x60
Nov 30 11:12:47 pc kernel: [   36.653325]  [<c01b4cc0>] ? chrdev_open+0x0/0x1b0
Nov 30 11:12:47 pc kernel: [   36.653333]  [<c01bdb1d>] do_filp_open+0x1bd/0x790
Nov 30 11:12:47 pc kernel: [   36.653342]  [<c019116a>] ? vma_prio_tree_remove+0x7a/0xf0
Nov 30 11:12:47 pc kernel: [   36.653356]  [<c01e1fce>] ? inotify_inode_queue_event+0xe/0xe0
Nov 30 11:12:47 pc kernel: [   36.653367]  [<c037e6dd>] ? _spin_lock+0xd/0x10
Nov 30 11:12:47 pc kernel: [   36.653374]  [<c01c9619>] ? expand_files+0x9/0x60
Nov 30 11:12:47 pc kernel: [   36.653383]  [<c01c9750>] ? alloc_fd+0xe0/0x100
Nov 30 11:12:47 pc kernel: [   36.653391]  [<c01afff5>] do_sys_open+0x65/0x100
Nov 30 11:12:47 pc kernel: [   36.653397]  [<c01b00fe>] sys_open+0x2e/0x40
Nov 30 11:12:47 pc kernel: [   36.653403]  [<c0103f7b>] sysenter_do_call+0x12/0x2f
Nov 30 11:12:47 pc kernel: [   36.653411]  =======================
Nov 30 11:12:47 pc kernel: [   36.890407] Bluetooth: Core ver 2.13


Nov 30 11:14:36 pc kernel: [  146.098923] Pid: 7418, comm: serial Not tainted 2.6.27-9-generic #1
Nov 30 11:14:36 pc kernel: [  146.098930]  [<c037c4b6>] ? printk+0x1d/0x1f
Nov 30 11:14:36 pc kernel: [  146.098954]  [<c01781bc>] __report_bad_irq+0x2c/0xa0
Nov 30 11:14:36 pc kernel: [  146.098970]  [<c0178344>] note_interrupt+0x114/0x140
Nov 30 11:14:36 pc kernel: [  146.098979]  [<c01770b1>] ? handle_IRQ_event+0x41/0x80
Nov 30 11:14:36 pc kernel: [  146.098988]  [<c0178d93>] handle_level_irq+0xd3/0x100
Nov 30 11:14:36 pc kernel: [  146.098997]  [<c0152074>] ? tick_periodic+0x34/0x80
Nov 30 11:14:36 pc kernel: [  146.099005]  [<c01520de>] ? tick_handle_periodic+0x1e/0x80
Nov 30 11:14:36 pc kernel: [  146.099013]  [<c0106c15>] do_IRQ+0x45/0x80
Nov 30 11:14:36 pc kernel: [  146.099025]  [<c0137898>] ? irq_exit+0x8/0x90
Nov 30 11:14:36 pc kernel: [  146.099035]  [<c0113f8d>] ? smp_apic_timer_interrupt+0x5d/0x90
Nov 30 11:14:36 pc kernel: [  146.099050]  [<c0105003>] common_interrupt+0x23/0x30
Nov 30 11:14:36 pc kernel: [  146.099058]  [<c013765a>] ? __do_softirq+0x6a/0x120
Nov 30 11:14:36 pc kernel: [  146.099065]  [<c013776d>] do_softirq+0x5d/0x60
Nov 30 11:14:36 pc kernel: [  146.099072]  [<c01378e5>] irq_exit+0x55/0x90
Nov 30 11:14:36 pc kernel: [  146.099078]  [<c0106c1a>] do_IRQ+0x4a/0x80
Nov 30 11:14:36 pc kernel: [  146.099085]  [<c0105003>] common_interrupt+0x23/0x30
Nov 30 11:14:36 pc kernel: [  146.099092]  [<c037e762>] ? _spin_unlock_irqrestore+0x22/0x40
Nov 30 11:14:36 pc kernel: [  146.099102]  [<c02bf0a0>] serial8250_startup+0x200/0x700
Nov 30 11:14:36 pc kernel: [  146.099117]  [<c02b9fca>] uart_startup+0x4a/0x140
Nov 30 11:14:36 pc kernel: [  146.099125]  [<c02baa43>] uart_open+0xb3/0x1c0
Nov 30 11:14:36 pc kernel: [  146.099132]  [<c02ba990>] ? uart_open+0x0/0x1c0
Nov 30 11:14:36 pc kernel: [  146.099139]  [<c02a343c>] __tty_open+0x15c/0x340
Nov 30 11:14:36 pc kernel: [  146.099153]  [<c02a3644>] tty_open+0x24/0x40
Nov 30 11:14:36 pc kernel: [  146.099160]  [<c01b4d95>] chrdev_open+0xd5/0x1b0
Nov 30 11:14:36 pc kernel: [  146.099172]  [<c01b01fc>] __dentry_open+0xbc/0x260
Nov 30 11:14:36 pc kernel: [  146.099179]  [<c01b0477>] nameidata_to_filp+0x47/0x60
Nov 30 11:14:36 pc kernel: [  146.099186]  [<c01b4cc0>] ? chrdev_open+0x0/0x1b0
Nov 30 11:14:36 pc kernel: [  146.099193]  [<c01bdb1d>] do_filp_open+0x1bd/0x790
Nov 30 11:14:36 pc kernel: [  146.099203]  [<c01e207c>] ? inotify_inode_queue_event+0xbc/0xe0
Nov 30 11:14:36 pc kernel: [  146.099214]  [<c025151a>] ? rb_insert_color+0xca/0x100
Nov 30 11:14:36 pc kernel: [  146.099226]  [<c019c819>] ? __anon_vma_link+0x9/0x30
Nov 30 11:14:36 pc kernel: [  146.099237]  [<c019a20b>] ? vma_link+0x5b/0xf0
Nov 30 11:14:36 pc kernel: [  146.099244]  [<c01c9619>] ? expand_files+0x9/0x60
Nov 30 11:14:36 pc kernel: [  146.099254]  [<c01c9750>] ? alloc_fd+0xe0/0x100
Nov 30 11:14:36 pc kernel: [  146.099261]  [<c01afff5>] do_sys_open+0x65/0x100
Nov 30 11:14:36 pc kernel: [  146.099268]  [<c013d9c1>] ? sys_rt_sigaction+0x51/0xa0
Nov 30 11:14:36 pc kernel: [  146.099277]  [<c01b00fe>] sys_open+0x2e/0x40
Nov 30 11:14:36 pc kernel: [  146.099283]  [<c0103f7b>] sysenter_do_call+0x12/0x2f
Nov 30 11:14:36 pc kernel: [  146.099291]  =======================

Nothing in the logs during shutdown though.

Any idea?