If you can, it is preferable to just boot using a backup kernel and sudo apt-get update, upgrade, dist-upgrade from there. If not then…1. Boot up a live cd, or separate linux install.

2. Mount your hardy drive somewhere (replace **** with name of drive, e.g. hda1 or sda1 etc. to figure out the drive devices use ‘parted print all’)
sudo mkdir /media/hardy
sudo mount /dev/**** /media/hardy

3. chroot into your gutsy drive.
sudo chroot /media/hardy su

4. Update your system via apt as normal. (sudo not required)
apt-get update
apt-get upgrade
apt-get dist-upgrade

5. ctrl+d or type “exit” to exit the chroot, then reboot the computer and you should be able to get back into hardy. Good luck

Note: Sometimes there will be no Internet connection in the chroot environment.

To correct this, before the chroot we have to enter:
sudo cp /etc/resolv.conf /media/hardy/etc/resolv.conf

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taken from http://ubuntuforums.org