The sequence to get a work around (whilst waiting for a response from Ubuntu) was:

1. Try and strip out the I2O subsytem from the initrd created by initramfs and then find it fails to load the dpt_i2o driver at all.
2. Use mkinitrd not mkinitramfs as that has enough sense not to include the I2O subsystem.
3. Find that the machine then crashes after your disks are mounted because hotplug tries to load I2O when it begins during the init scripts.
4. Remove or move somewhere innocuous the /lib/modules/2.6.12-9-686-smp/kernel/drivers/message/i2o directory and reboot.
5. Update the bug report in the hope you won’t have to go through it again!

Finally my machine boots…