Yes, thats the same I experienced. I created a Live-CD, based on 8.10. In the main menu System -> Administration there is the option to create a USB startup disk which I did (8 GB). Then I performed the an update with the update manager, it ended with the described error message.
-- package linux-image-2.6.27-7-generic 2.6.27-7.16 failed to install/upgrade: subprocess post-installation script returned error exit status 17 https://bugs.launchpad.net/bugs/305817 You received this bug notification because you are a member of Ubuntu Bugs, which is subscribed to Ubuntu. -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs