I had the following lines in my /etc/network/interfaces:

auto lo
iface lo inet loopback
    address 127.0.0.1
    netmask 255.0.0.0

but it didn't do anything for me. Downgrading to upstart 0.6.3-10 solved
the annoying grub issue (by running grub-common) but sometimes the
scripts in /etc/rc2.d have run without the eth0 interface being brought
up which was also incorrect. So I have tested the proposed version of
ifupdown and it seems to me that it is working correctly. I made 4 test
reboots and all of them were successful.

-- 
upstart not starting init-scripts (event net-device-up IFACE=lo missing)
https://bugs.launchpad.net/bugs/497299
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