Boot with degraded RAID5 still fails on Ubuntu 16.04 LTS

Steps to reproduce (VirtualBox is fine for testing):

1. Get a server with 4 disks
2. Start Ubuntu server install
3. Partition all disks with msdos partition tables and create one big partition starting at 1 MB on each disk.
4. Create mdadm RAID5 block device from these partitions
5. Create LVM volume group on RAID5
6. Create LVM volume on the group
7. Create root file system on the LVM volume
8. Install system on the root file system
9. Boot the system (works fine despite all the files inside RAID5 because grub is smart enough)
10. Run sudo dpkg-reconfigure grub-pc and install grub on all physical disks (sd*)
11. Shutdown the system
12. Disconnect the first hard drive
13. Boot the system

Expected results:
System boots with degraded RAID

Actual results:
Initrd scripts hang during boot (grub boots okay).

Caused by incorrect fix in https://bugs.launchpad.net/ubuntu/+source/mdadm/+bug/1635049

$ apt-cache policy mdadm
mdadm:
  Installed: 3.3-2ubuntu7.2
  Candidate: 3.3-2ubuntu7.2
  Version table:
 *** 3.3-2ubuntu7.2 500
        500 http://fi.archive.ubuntu.com/ubuntu xenial-updates/main amd64 Packages
        100 /var/lib/dpkg/status
     3.3-2ubuntu7 500
        500 http://fi.archive.ubuntu.com/ubuntu xenial/main amd64 Packages

Note that this bug is fixed mdadm version 3.4 but Ubuntu Xenial still has version 3.3. Installing mdadm package from Ubuntu 16.10 fixes the problem.

ProblemType: Bug
DistroRelease: Ubuntu 16.04
Package: mdadm 3.3-2ubuntu7.2
ProcVersionSignature: Ubuntu 4.8.0-53.56~16.04.1-lowlatency 4.8.17
Uname: Linux 4.8.0-53-lowlatency x86_64
ApportVersion: 2.20.1-0ubuntu2.6
Architecture: amd64
CurrentDesktop: X-Cinnamon
Date: Wed Jun 28 11:25:03 2017
InstallationDate: Installed on 2015-02-23 (855 days ago)
InstallationMedia: Ubuntu 14.04.2 LTS "Trusty Tahr" - Release amd64 (20150218.1)
MDadmExamine.dev.sda: Error: command ['/sbin/mdadm', '-E', '/dev/sda'] failed with exit code 1: mdadm: cannot open /dev/sda: Permission denied
MDadmExamine.dev.sdb: Error: command ['/sbin/mdadm', '-E', '/dev/sdb'] failed with exit code 1: mdadm: cannot open /dev/sdb: Permission denied
MDadmExamine.dev.sdc: Error: command ['/sbin/mdadm', '-E', '/dev/sdc'] failed with exit code 1: mdadm: cannot open /dev/sdc: Permission denied
MDadmExamine.dev.sdd: Error: command ['/sbin/mdadm', '-E', '/dev/sdd'] failed with exit code 1: mdadm: cannot open /dev/sdd: Permission denied
MDadmExamine.dev.sde: Error: command ['/sbin/mdadm', '-E', '/dev/sde'] failed with exit code 1: mdadm: cannot open /dev/sde: Permission denied
MDadmExamine.dev.sdf: Error: command ['/sbin/mdadm', '-E', '/dev/sdf'] failed with exit code 1: mdadm: cannot open /dev/sdf: Permission denied
MDadmExamine.dev.sdf1: Error: command ['/sbin/mdadm', '-E', '/dev/sdf1'] failed with exit code 1: mdadm: cannot open /dev/sdf1: Permission denied
MDadmExamine.dev.sdg: Error: command ['/sbin/mdadm', '-E', '/dev/sdg'] failed with exit code 1: mdadm: cannot open /dev/sdg: Permission denied
MDadmExamine.dev.sdg1: Error: command ['/sbin/mdadm', '-E', '/dev/sdg1'] failed with exit code 1: mdadm: cannot open /dev/sdg1: Permission denied
MDadmExamine.dev.sdg2: Error: command ['/sbin/mdadm', '-E', '/dev/sdg2'] failed with exit code 1: mdadm: cannot open /dev/sdg2: Permission denied
MDadmExamine.dev.sdh: Error: command ['/sbin/mdadm', '-E', '/dev/sdh'] failed with exit code 1: mdadm: cannot open /dev/sdh: Permission denied
MDadmExamine.dev.sdh1: Error: command ['/sbin/mdadm', '-E', '/dev/sdh1'] failed with exit code 1: mdadm: cannot open /dev/sdh1: Permission denied
MachineType: System manufacturer System Product Name
ProcKernelCmdLine: BOOT_IMAGE=/boot/vmlinuz-4.8.0-53-lowlatency root=UUID=254cacdb-f61b-45a6-9885-37afd2b598ce ro quiet splash vt.handoff=7
ProcMDstat:
 Personalities : [raid0] [linear] [multipath] [raid1] [raid6] [raid5] [raid4] [raid10]
 md0 : active raid0 sdd[3] sdc[2] sda[0] sdb[1]
       781443840 blocks super 1.2 64k chunks

 unused devices: <none>
SourcePackage: mdadm
UpgradeStatus: Upgraded to xenial on 2016-06-10 (383 days ago)
dmi.bios.date: 02/04/2013
dmi.bios.vendor: American Megatrends Inc.
dmi.bios.version: 1101
dmi.board.asset.tag: To be filled by O.E.M.
dmi.board.name: P8H77-M PRO
dmi.board.vendor: ASUSTeK COMPUTER INC.
dmi.board.version: Rev X.0x
dmi.chassis.asset.tag: Asset-1234567890
dmi.chassis.type: 3
dmi.chassis.vendor: Chassis Manufacture
dmi.chassis.version: Chassis Version
dmi.modalias: dmi:bvnAmericanMegatrendsInc.:bvr1101:bd02/04/2013:svnSystemmanufacturer:pnSystemProductName:pvrSystemVersion:rvnASUSTeKCOMPUTERINC.:rnP8H77-MPRO:rvrRevX.0x:cvnChassisManufacture:ct3:cvrChassisVersion:
dmi.product.name: System Product Name
dmi.product.version: System Version
dmi.sys.vendor: System manufacturer
etc.blkid.tab: Error: [Errno 2] No such file or directory: '/etc/blkid.tab'