the problem you are experiencing sounds exactly like the problem i solved this last weekend (but with 2.4.27 kernel source from debian etch, built with make-kpkg, where i refused to enable devfs in the kernel because of past problems).

cat <<eof>/etc/mkinitrd/scripts/include_hda.sh
#!/bin/sh
echo copying device files corresponding to lvm partitions
# actually copying all files associated with hard drive
cp -av /dev/hda* ${INITRDDIR}/dev/
echo done
EOF

chmod 755 /etc/mkinitrd/scripts/include_hda_devs.sh

my exact problem was that mkinitrd expects devfs to be used (and tries to mount devfs which fails), so no dev files are included in the initrd. but vgscan and vgchange need the dev files to "discover" your lvm physical volumes.

also, by default mkinitrd uses cramfs for the initrd, but historically the stock kernel (maybe just 2.4) didn't include cramfs. you can build an initrd of a specific filesystem type by setting MKIMAGE to the proper command within /etc/mkinitrd/mkinitrd.conf.

if that doesn't solve your problem, then you can do the following to enable further investigation:

apt-get install busybox

# set MODULES=ALL, DELAY=10, BUSYBOX=yes
editor /etc/mkinitrd/mkinitrd.conf

cat <<eof>/etc/mkinitrd/scripts/include_lvm_utils.sh
#!/bin/bash -xv
rm -f ${INITRDDIR}/sbin/{vgscan,vgchange}
cp {,${INITRDDIR}}/sbin/lvmiopversion
for FILE in /lib/lvm-10/*; do
cp ${FILE} ${INITRDDIR}/${FILE}
ln -s lvmiopversion ${INITRDDIR}/sbin/$(basename ${FILE})
done
EOF

chmod 755 /etc/mkinitrd/scripts/include_lvm_utils.sh

mkinitrd -k -o /boot/initrd.img-<version> <version>

-k is useful because if you want to inspect the contents of the initrd it is much easier to peruse the build directory than loop-mounting the initrd image.

for me version = 2.4.27-11+1-686 as that was the version of the corresponding kernel-image package i built with make-kpkg. (i really recommend make-kpkg though i've only ever used it to compile kernel-source packages, not stock kernels.)

when booting the initrd it should print a message similar to "pausing to allow user to interrupt the boot process by pressing enter". press enter. now start probing around the system. if your initrd is cramfs, which is read-only, and you want/need to create files, then you'll need to "mount tmpfs tmpfs /blah" to give you a writable directory (and lvm needs a writable /etc).

that worked for me, maybe it'll help you.

yes, now :-) i emailed steve about it and received this:
"Strange. I've fixed it for the moment, but I'm not 100% sure what went wrong. I'll experiment, thanks for letting me know.

Steve"

i don't believe udev is required to boot 2.6.12 (but possibly just a populated /dev, whether static or populated by udev).

case in point: i have a sarge AMD64 server that i've tested with linux-source-2.6.12 from ubuntu's breezy. udev is not installed, but initrd-tools boots my raid1+lvm2 setup just fine with 2.6.12. devfs is enabled in the kernel (default ubuntu kernel config), but i have a static /dev as i don't use devfs (and i'm regretting using udev on my etch desktop as it's a pain to learn udev's configuration file format and it never seems to work "just right").

side note: why use ubuntu's 2.6.12 kernel? debian sarge's 2.6.8 kernel-image doesn't contain ata pass-through for sata drives to enable smart, but ubuntu's 2.6.12 does and ubuntu provides security support for it (and will continue for a minimum of 18 months).