Decided to put this in one place so everyone can see what to do. Firstly thanks Zenith432 for finding the offending extension and showing 10.7.1 still works. The post is here.
If you have yet to upgrade then follow these simple steps to avoid the problem.
1. Take a snapshot, backup or do something to make sure you can always get back if something goes wrong.
2. Start the Lion guest and the open a Terminal under Applications Utilities
3. Copy the existing AppleLSIFusionMPT.kext to the current directory:cp -rv /System/Library/Extensions/AppleLSIFusionMPT.kext .4. Now run the 10.7.2 update package but stop and do not reboot - if you do go find that backup or snapshot as you will have to start again! See the attached image.
5. Go back to the terminal prompt and run these 2 commands. You will be prompted for your password.sudo rm -rfv /System/Library/Extensions/AppleLSIFusionMPT.kext sudo cp -rv AppleLSIFusionMPT.kext /System/Library/Extensions6. Now you can reboot.
If everything is done correctly should reboot successfully using the older SCSI driver.
Thanks for this post. I was able to successfully upgrade to 10.7.2. Now installing mac OS X server