Your /etc/default/grub file has double quotes around a lot of things
that do not require them, this is what my file looks like:

GRUB_DEFAULT=0
GRUB_HIDDEN_TIMEOUT=0
GRUB_HIDDEN_TIMEOUT_QUIET=true
GRUB_TIMEOUT=10
GRUB_DISTRIBUTOR=`lsb_release -i -s 2> /dev/null || echo Debian`

Notice how none of those have double quotes around them but yours does.
Additionally, I suspect problems with all of the following lines:

GRUB_SAVEDEFAULT="false"
export 
GRUB_MENU_PICTURE="/home/egc/Downloads/chile_independence_day_2013-2015005-hp.jpg"
export GRUB_COLOR_NORMAL="black/light-gray"
export GRUB_COLOR_HIGHLIGHT="magenta/light-gray"

In picture the path for GRUB_MENU_PICTURE as your home directory will
not be mounted when grub is running.  Please try fixing all the things
I've mentioned and rerunning 'sudo /usr/sbin/update-grub'.

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https://bugs.launchpad.net/bugs/1257736

Title:
  Grub keeps loading release 3.2.0-53-generic-pae, but i've downloaded
  all the updates.

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