This happened during this mornings dist-upgrade along with apport failure.

:~$ sudo apt-get dist-upgrade

Reading package lists... Done

Building dependency tree       

Reading state information... Done

Calculating upgrade... Done

0 upgraded, 0 newly installed, 0 to remove and 0 not upgraded.

3 not fully installed or removed.

After this operation, 0 B of additional disk space will be used.

Do you want to continue [Y/n]? 

Setting up linux-image-3.5.0-32-generic (3.5.0-32.53~precise1) ...

Running depmod.

update-initramfs: deferring update (hook will be called later)

Examining /etc/kernel/postinst.d.

run-parts: executing /etc/kernel/postinst.d/apt-auto-removal 3.5.0-32-generic /boot/vmlinuz-3.5.0-32-generic

run-parts: executing /etc/kernel/postinst.d/dkms 3.5.0-32-generic /boot/vmlinuz-3.5.0-32-generic

run-parts: executing /etc/kernel/postinst.d/initramfs-tools 3.5.0-32-generic /boot/vmlinuz-3.5.0-32-generic

update-initramfs: Generating /boot/initrd.img-3.5.0-32-generic

run-parts: executing /etc/kernel/postinst.d/pm-utils 3.5.0-32-generic /boot/vmlinuz-3.5.0-32-generic

run-parts: executing /etc/kernel/postinst.d/update-notifier 3.5.0-32-generic /boot/vmlinuz-3.5.0-32-generic

run-parts: executing /etc/kernel/postinst.d/zz-update-grub 3.5.0-32-generic /boot/vmlinuz-3.5.0-32-generic

/usr/sbin/grub-mkconfig: 36: /etc/default/grub: Syntax error: EOF in backquote substitution

run-parts: /etc/kernel/postinst.d/zz-update-grub exited with return code 2

Failed to process /etc/kernel/postinst.d at /var/lib/dpkg/info/linux-image-3.5.0-32-generic.postinst line 1010.

dpkg: error processing linux-image-3.5.0-32-generic (--configure):

 subprocess installed post-installation script returned error exit status 2

dpkg: dependency problems prevent configuration of linux-image-generic-lts-quantal:

 linux-image-generic-lts-quantal depends on linux-image-3.5.0-32-generic; however:

  Package linux-image-3.5.0-32-generic is not configured yet.

dpkg: error processing linux-image-generic-lts-quantal (--configure):

 dependency problems - leaving unconfigured

dpkg: dependency problems prevent configuration of linux-generic-lts-quantal:

 linux-generic-lts-quantal depends on linux-image-generic-lts-quantal; however:

  Package linux-image-generic-lts-quantal is not configured yet.

dpkg: error processing linux-generic-lts-quantal (--configure):

 dependency problems - leaving unconfigured

No apport report written because the error message indicates its a followup error from a previous failure.

                          No apport report written because the error message indicates its a followup error from a previous failure.

                                                    Errors were encountered while processing:

 linux-image-3.5.0-32-generic

 linux-image-generic-lts-quantal

 linux-generic-lts-quantal

E: Sub-process /usr/bin/dpkg returned an error code (1)

On apport:

https://bugs.launchpad.net/ubuntu/+source/grub-pc/+filebug/f276b6c8-c9ff-11e2-ae36-68b5996a96c8?field.title=package+linux-image-3.5.0-32-generic+3.5.0-32.53~precise1+failed+to+install%2Fupgrade%3A+run-parts%3A+%2Fetc%2Fkernel%2Fpostinst.d%2Fzz-update-grub+exited+with+return+code+2

and "Launchpad.net ~ Lost something? ~ This page does not exist, or you may not have permission to see it."

This is a simple Mythbuntu/XFCE4 x86_64 system as part of a HTPC.