There've been a number cases of this particular error. There may be
different causes but the ones I have seen are not wubi-specific:
sometimes when the kernel is updated the initial ram disk is not
generated correctly. You can tell If this is the problem by booting a
previous kernel - if it works then it's got nothing to do with a corrupt
root.disk or unclean ntfs etc.

Once you've booted from the old kernel, you can rebuild the initrd.img on the 
latest kernel:
sudo update-initramfs -u -k <latest_kernel_release>

If you only have one kernel, then you have to chroot into it to rebuild
the initrd.img which is more complex for Wubi.

Lately, most wubi problems are related to bad grub updates:
https://wiki.ubuntu.com/WubiGuide#Warning

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https://bugs.launchpad.net/bugs/581157

Title:
  Ubuntu 10.4 drops to a BusyBox / Initramfs shell - WON'T BOOT UP AT
  ALL

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