diff --git a/ChangeLog b/ChangeLog
index 9de46681d..b307b5668 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,3 +1,9 @@
+2008-06-15  Robert Millan  <rmh@aybabtu.com>
+
+	* util/grub.d/10_linux.in: Use the underliing device for loop-AES
+	devices.
+	Reported by Max Vozeler.
+
 2008-06-15  Robert Millan  <rmh@aybabtu.com>
 
 	* util/i386/pc/grub-mkimage.c (generate_image): If we included a drive
diff --git a/util/grub.d/10_linux.in b/util/grub.d/10_linux.in
index 9aac6327b..1ae1e1e51 100644
--- a/util/grub.d/10_linux.in
+++ b/util/grub.d/10_linux.in
@@ -28,7 +28,16 @@ else
 fi
 
 if [ "x${GRUB_DEVICE_UUID}" = "x" ] || [ "x${GRUB_DISABLE_LINUX_UUID}" = "xtrue" ] ; then
-  LINUX_ROOT_DEVICE=${GRUB_DEVICE}
+  # loop-AES arranges things so that /dev/loop/X can be our root device, but
+  # the initrds that Linux uses don't like that.
+  case ${GRUB_DEVICE} in
+    /dev/loop/*|/dev/loop[0-9])
+      LINUX_ROOT_DEVICE=`losetup ${GRUB_DEVICE} | sed -e "s/^[^(]*(\([^)]\+\)).*/\1/"`
+    ;;
+    *)
+      LINUX_ROOT_DEVICE=${GRUB_DEVICE}
+    ;;
+  esac
 else
   LINUX_ROOT_DEVICE=UUID=${GRUB_DEVICE_UUID}
 fi