Comment 5 for bug 625383

It seems unlikely to me that this is a GRUB bug. The evidence suggests that GRUB is simply not being loaded at all.

Here is the Syslinux documentation on LOCALBOOT, and note that the permissible values for PXELINUX are *not* the same as for ISOLINUX:

    LOCALBOOT type [ISOLINUX, PXELINUX]
        On PXELINUX, specifying "LOCALBOOT 0" instead of a "KERNEL"
        option means invoking this particular label will cause a local
        disk boot instead of booting a kernel.

        The argument 0 means perform a normal boot. The argument 4
        will perform a local boot with the Universal Network Driver
        Interface (UNDI) driver still resident in memory. Finally,
        the argument 5 will perform a local boot with the entire PXE
        stack, including the UNDI driver, still resident in memory.
        All other values are undefined. If you don't know what the
        UNDI or PXE stacks are, don't worry -- you don't want them,
        just specify 0.

        On ISOLINUX, the "type" specifies the local drive number to
        boot from; 0x00 is the primary floppy drive and 0x80 is the
        primary hard drive. The special value -1 causes ISOLINUX to
        report failure to the BIOS, which, on recent BIOSes, should
        mean that the next boot device in the boot sequence should be
        activated.

In addition, the Syslinux 4.00 changelog says that -1 is also supported for PXELINUX. However, 0x80 is out of spec for PXELINUX.

If the BIOS doesn't do what you want for any of these defined values, then it is not at all clear to me that there is anything that we can do about it. I don't know what to suggest.