After I updated to 2.6.35-28, my Plymouth graphics still works, but when the system tries to launch X11 and GDM, the screen would flicker several times and it will fall back to TTY.
In the TTY screen, above the login prompt is this message:
Can not find sep2_1-x32-2.6.35-28-genericsmp.ko in . directory. Compile from source.
well, that's the gist of it anyway. I can still use my 2.6.36-27. Though I have no idea what's causing this. When I upgrade to 2.6.36-27, at first i had similar problems where GDM couldn't start, though it didn't have this error message, it just said Xorg crashed.