OK. I've figured out why this was happening.  If I remove the vga=
option from the /boot/grub/menu.lst, usplash works fine and so does
suspend and hibernate.  It seems that passing that option to grub is not
necessary and was breaking suspend and hibernate (on wake up).

Bug closed.

-- 
Usplash appears to break suspend/hibernate
https://bugs.launchpad.net/bugs/140892
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