I believe I have also encountered this bug.
I tried upgrading the kernel in a Live USB based on Lucid Alpha 3 version (64bit). The upgrade was completed sucessfully, but indeed didn't update the initrd.lz file.
After booting, I get the following error:
> Coud not find /lib/modules/2.6.32-15-generic/modules.dep
Followed by:
> Unable to find a medium containing a live filesystem.
I believe I have also encountered this bug. 2.6.32- 15-generic/ modules. dep
I tried upgrading the kernel in a Live USB based on Lucid Alpha 3 version (64bit). The upgrade was completed sucessfully, but indeed didn't update the initrd.lz file.
After booting, I get the following error:
> Coud not find /lib/modules/
Followed by:
> Unable to find a medium containing a live filesystem.
Haggai