I've managed to fix it with

sudo -i
cd /etc/rc2.d
ln -s S10dbus ../init.d/dbus
rm S50dbus

I'm not sure why HAL is S12hal and dbus was S50dbus when HAL needs dbus
to function.

I wonder what the proper fix is?

-- 
[gutsy] failed to initialize hal
https://bugs.launchpad.net/bugs/137559
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