Could the problem be the disks in the grub conf? This is what is there now:
title Ubuntu 12.04.2 LTS, kernel 3.2.0-39-virtual root (hd0) kernel /boot/vmlinuz-3.2.0-39-virtual root=LABEL=cloudimg-rootfs ro console=hvc0 initrd /boot/initrd.img-3.2.0-39-virtual title Ubuntu 12.04.2 LTS, kernel 3.2.0-39-virtual (recovery mode) root (hd0) kernel /boot/vmlinuz-3.2.0-39-virtual root=LABEL=cloudimg-rootfs ro single initrd /boot/initrd.img-3.2.0-39-virtual title Ubuntu 12.04.2 LTS, memtest86+ root (hd0) kernel /boot/memtest86+.bin
