This looks relevant, I hope this helps:

/usr/sbin/grub-mkconfig: 13: /etc/default/grub: psmouse.resolution=1200:
not found

Thanks

** Information type changed from Private Security to Public

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https://bugs.launchpad.net/bugs/1780785

Title:
  package linux-image-generic 4.4.0.130.136 failed to install/upgrade:
  run-parts: /etc/kernel/postinst.d/zz-update-grub exited with return
  code 127

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