Comment 88 for bug 1386005

To add one more data point, I hit the same problem when upgrading from Kubuntu 14.04 to 16.04.

Ondrej's workaround is also effective for my setup. In the end, the upgraded system was unusable for other problems as well so I did a fresh install. However, I kept the lvm volume group on luks device as my /home is there as well and I wanted to keep that.

After installation from the Kubunut desktop disc (via usb flash drive) and setting up crypttab manually I still had the same problem: Entering the password via the graphical boot ignores the input. Hitting Alt-Cursor right and Alt-Cursor left I get a text screen with the password I entered.

It's working in text mode thought.