Real faulty package name linux-image-686: Kernel panic on boot

After synaptic has updated the linux-image-2.6.10-5-686 to linux-image-2.6.12-10-686 on Ubuntu Breezy, on next reboot the computer failed to boot with:

[...]
Ramdisk ran out of compression data
invalid compressed format (err=1)
Kernel panic not syncing: VFS unable to mount root fs

Booting with the 2.6.10-5-686 image is OK. The machine is an ASUS notebook.

From cpuinfo:
processor : 0
vendor_id : GenuineIntel
cpu family : 6
model : 13
model name : Intel(R) Pentium(R) M processor 1.60GHz
stepping : 6
cpu MHz : 1600.121
cache size : 2048 KB
fdiv_bug : no
hlt_bug : no
f00f_bug : no
coma_bug : no
fpu : yes
fpu_exception : yes
cpuid level : 2
wp : yes
flags : fpu vme de pse tsc msr mce cx8 apic sep mtrr pge mca cmov pat clflush dts acpi mmx fxsr sse sse2 ss tm pbe est tm2
bogomips : 3170.30

From meminfo:
MemTotal: 515668 kB
MemFree: 41828 kB
Buffers: 28196 kB
Cached: 276348 kB
SwapCached: 0 kB
Active: 283876 kB
Inactive: 160732 kB
HighTotal: 0 kB
HighFree: 0 kB
LowTotal: 515668 kB
LowFree: 41828 kB
SwapTotal: 1044064 kB
SwapFree: 1044064 kB
Dirty: 100 kB
Writeback: 0 kB
Mapped: 184088 kB
Slab: 20964 kB
CommitLimit: 1301896 kB
Committed_AS: 261288 kB
PageTables: 1704 kB
VmallocTotal: 507896 kB
VmallocUsed: 5232 kB
VmallocChunk: 502536 kB

--
Daniel