how were you able to connect to the server? I'm having the same issue but I can't even ping my server and with gpu passthrough I can't even use a monitor as I have no video out after pre starts to boot
In my case, macgro1 instructions were spot on.
To fix my issue, at GRUB menu, I chose advanced.
At that next menu, I chose my previous kernel version and then was able to boot.
BTW - if you "e" at GRUB (while system is still not booting), you'll notice that you're missing the required initrd line, which is why you're unable to boot.
That line gets created after a successful "apt install pre-kernel ..."
Once booted, I tried to do the "apt install pre-kernel .... " which did NOT work until I did as macgr01 recommended.
Which is to see which folder was showing in the error (within /var/lib ... after running "apt install pve-kernel ..."), and moved that folder to /tmp (or anywhere else you want).
Then I was able to successfully run the "apt install pve-kernel ..."
I then rebooted, and was able to boot into new kernel w/ Proxmox 8.
Lastly to get GPU passthrough working again:
1) uninstalled my old nVidia driver
2) downloaded the latest ".run" driver file (from nVidia website)
3) chmod +x the file
4) run it to install new driver
5) make sure to do the usual blacklist of driver (so I can use the card in my LXC & VM)
6) reboot