When using the bootcode vga=788 Grub2 generates an error message indicating that it is now deprecated in favour of "gfxpayload=800x600x16,800x600" and fails to set the required resolution. The boot completes OK but the text portion (pre GUI) is 25 lines x 80 columns.
For information here is the relevant line from /mnt/hda1/boot/grub/grub.cfg:
"linux /boot/bzImage quiet norestore tz=GMT+1BST,M3.5.0/2,M3.5.0/2 kmap=uk home=hda1 opt=hda1 vga=788"
The bootcode works as expected with legacy Grub and, of course with TC when not using Grub.