9.10 is using grub2.  It does not use menu.lst.  It uses grub.cfg which was 
generated automatically.
see: https://help.ubuntu.com/community/Grub2
Looks like the upgrade from  9.10 to 10.4 did not consider grub2 used.

I have to manually update grub.cfg to make the server boot to new
kernal.

I tried "apt-get dist-upgrade" before.  It also failed with looking for
menu.lst and no update to grub.cfg

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https://bugs.launchpad.net/bugs/745427

Title:
  package linux-image-2.6.32-30-server 2.6.32-30.59 failed to
  install/upgrade:

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