Got the same issue today (system hangs after /scripts/init-bottom)

Thanks to poster before, I was able to fix the issue.

My steps:
1) change recovery mode command line in GRUB from "ro single" to "rw break=init"
2) chroot /root /bin/bash
3) dhclient (to get IP/network configuration)
4) apt-get update
5) apt-get install upstart initscripts sysv-rc sysvinit-utils initramfs-tools
6) reboot (system fails)
7) reboot again (system comes up this time)

Also, have the maintainers/developers of critical system packages like
upstart thought about, you know, testing? It's not that hard to set up a
VM with qemu/KVM. One hour of your time could save hundreds of hours of
your users' time and frustration. Thanks.

-- 
karmic boot hung after /scripts/init-bottom
https://bugs.launchpad.net/bugs/430272
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