Public bug reported:

A vary bad consequence of this is that it causes sudo to fail locking
the administrator out of the machine.

Prior to the upgrade I had manually edited /etc/hosts, maybe the
installer doesn't like that?.

To fix it you have to boot in failsafe mode and manually add the
hostname to /etc/hosts.

e.g.

127.0.1.1 myhostname

** Affects: ubuntu
     Importance: Undecided
         Status: New

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Upgrade from Kubuntu 7.10 to 8.04 removes hostname from /etc/hosts
https://bugs.launchpad.net/bugs/225439
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