Downgrading the kernel to version 3.2.0-63 is also a viable workaround if you didn't save a snapshot before installing the updates (like me).

To do this, first resize the window such that only one of split panes remains visible.  This makes the environment somewhat usable.

Then start System Tools->Administration->Synaptic Package Manger and mark linux-image-3.2.0-64-generic and linux-headers-3.2.0-64-generic for removal and mark linux-image-3.2.0-63-generic and linux-headers-3.2.0-63-generic for reinstallation.  Then hit apply.  Reboot the VM when update has completed.