12.04 drops into initrd on boot, but no errors

We have a machine running Ubuntu Precise Pangolin, which boots into initrd's busybox. From what I understand, this normally happens if the proper kernel can't be loaded. But in our case, a simple exit at the initrd prompt boots the system just fine without any errors or warnings.

What could be causing this? The relevant grub.cfg entry looks like this:

menuentry 'Ubuntu, with Linux 3.2.0-80-generic' --class ubuntu --class gnu-linux --class gnu --class os {
        recordfail
        gfxmode $linux_gfx_mode
        insmod gzio
        insmod part_msdos
        insmod ext2
        set root='(hd5,msdos1)'
        search --no-floppy --fs-uuid --set=root 0977ef08-2737-4d1d-9ec6-31f6719c3ad4
        linux   /boot/vmlinuz-3.2.0-80-generic root=UUID=0977ef08-2737-4d1d-9ec6-31f6719c3ad4 ro   splash quiet $vt_handoff
        initrd  /boot/initrd.img-3.2.0-80-generic
}