For reference, I will post my solution as well.

First, I undid the divert performed by ubiquity via:
$ sudo rm /usr/sbin/update-initramfs
$ sudo dpkg-divert --rename --remove /usr/sbin/update-initramfs

Then I was able to generate initrd images for all kernels via:
$ sudo update-initramfs -c -t -k all

And then updated grub as usual:
$ sudo update-grub

I have since pulled down a kernel via "Update Manager" and update-
initramfs is now being triggered as intended by /etc/kernel/postinst.d
/initramfs-tools, which now generates working boot configurations.

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https://bugs.launchpad.net/bugs/974765

Title:
  Drive not found since 3.2.0-21... kernel panic, unable to mount root
  fs

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