Hello
It seems the source machine doesn't have a separate '/boot' volume, It is probably a directory in '/'. This is quite strange because '/' is in a logical volume. Only GRUB2 can boot from logical volumes and AFAIK Ubuntu 8 is still with GRUB1.
Converter 5.x can't convert machines with '/boot' in a logical volume. OTOH, although this functionality can be expected to be added in the next version, Ubuntu 8 can't be converted anymore since probably 5.0 (not sure about the exact version, check the release notes).