I am hitting the same problem. This reproduces 100% of the time.
Additionally, it takes me to the system configuration screen. It has
somehawe reset the hostname of my laptop, too, and asks me to create a
new user apart from asking about keyboard layout, time zone, & language.

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karmic: gdm should not start in single user (recovery) mode
https://bugs.launchpad.net/bugs/431176
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