Solved the problem by booting recover kernel (had to add i915.modeset=1
to grub entry). After the error message type:

mountall

then a blue menu appeared

typed sudo gdm to start gnome

Had a look at the latest updated packages. With Synaptic removed current
version of mountall (mountall 2.15.1). Used apt-get to downgrade to
previous version of mountall

Also downgraded kernel version

Ubuntu starts again.

Cheers

-- 
Gave up waiting for root device after upgrade then busybox console
https://bugs.launchpad.net/bugs/360378
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