Linode.com have yet again increased members' hdd storage for free (article) and I ended up with physical VPS disk of 20GB and pre-increase partition of 16GB. Most users can resize their disk image in linode dashboard and after reboot VPS will recognize increased disk size and all will be zen. But if you're a power user like me (with endless experiments' inflicted headaches) you are probably using raw disk image with multiple partitions one of which is for LVM and you want to grow it to occupy all the extra space. Read on.

For the impatient:
Resizing single physical partition to occupy entire drive space is done using fdisk by first deleting your existing patition and then recreating it with EXACTLY SAME STARTING SECTOR NUMBER. ending sector can be anything you want (by default fdisk selects very last sector number to give your partition maximum size). If everything done correctly your data will be unharmed on next reboot.

Long version:
Initially this is what my disk looked like (using fdisk -u sectors -l )

Few very important things to note here, and make sure to write them down as they will be crucial to final steps of resizing filesystem):
1) starting sector is "63". it is crucial, without this information your resize will fail.
2) partition system id is "8e" which in human terms is called 'Linux LVM'

Lets begin
1) reboot into "Rescue" mode on your linode dashboard. Be sure to note which device your LVM drive is mapped to (my mapped to /dev/xvdc)
2) delete and recreate larger partition using fdisk

3) reboot into normal non-rescue OS on your linode.

At this on my linode fdisk reported the following (compare with above initial fdisk -l)

Since you are using LVM you already probably know that increasing physical partition does not automatically resize your logical partitions. I am leaving it as exercise to the reader to find out how to resize their lvm volumes. (hint first look at pvresize, then use lvresize on individual logical volumes to redistribute new free space as necessary).