I have some useful info to contribute I think.

I just got myself a 340Gb IDE drive. The bios claims it is only on a 139Gb 
drive but the Karmic installer recognized the full 
drive and the installer seemed to work fine. However when trying to boot into 
my freshly installed sytem I got the error described above.

Reinstalling with a small root partition of 30Gb and allocating the rest
of the drive as a /home partition solved the problem.

-- 
Grub 2 problem, error: no such device
https://bugs.launchpad.net/bugs/403408
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