can you try appending "break=top" to you pxelinux.cfg/default file?
The break should give you a shell in the initrd from which you should be
able to do some more debugging.
You may also want to remove quiet and splash from it to get more output.
** Changed in: ltsp (Ubuntu)
Status: New => Incomplete
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https://bugs.launchpad.net/bugs/612482
Title:
boot fails after Loading initrd.img ...
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