Comment 1 for bug 236307

I also had this problem.
I salvaged my installation, but I'm still not aware of what actually solved the problem. I'm also not sure how stable my system is now.

Here is what I did, but I can't say I figured out the cause-effect relationship. It did lead me to the right path of a working computer.

My intention was to backup my home folder to a networked computer, thinking I would have to do a fresh install, but I ended up fixing the problem (however inelegantly).

My first clue, in retrospect, was that after the upgrade, but before the restart that started the busybox-syndrome, I did look at my menu.lst file, and it looked like a hybrid: it had duplicate sections, with one referencing 2.6.24-17 and the other referencing 2.6.24-16. I trusted that this was normal, or at least acceptable to the OS. Well, maybe it's not.

1) I loaded the LiveCD and started a live session (I'm not sure how you would do this in Wubi but I think you will have a parallel).
While I was initially able to see my home folder, I couldn't copy it, because I didn't have permisison to do more that look at. So, I asked for help.
References:
https://answers.launchpad.net/ubuntu/+question/34816

2) I followed Knut's first suggestion to run " 'sudo nautilus' in a terminal. This will open a new window witch have root rights."
Note: I'm not sure if this step was actually necessary, but I did in fact do it. I got a terminal window as expected, but I also got an error message. Regardless, I kept open the terminal window that appeared and used it for the following steps.

3) Because I have some experience editing my menu.lst file to get Ubuntu stable, I went into the folder that houses the file.

4) There I deleted the "hybrid" menu.lst file and restored my menu.backup file from the pre-2.6.24-17 upgrade.

5) I also saw "duplicate" files in the folder: one set for linux 2.6.24-17 and one set for 2.6.24-16. I deleted all the files with 2.6.24-17 in the file name.
I did this because of your successful troubleshooting.

6) Rebooted...all was well.

Now, *what* actually worked? I'm not sure. I'm not in a position to experiment, since I have to keep the computer up and running for my father.

So, the logical question is: "Which kernel am I actually running? -16? or -17?" At this point, I'm not aware how to determine that.

I think we're narrowing down the problem though.