Thank you all for investigating and fixing this.

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https://bugs.launchpad.net/bugs/1959085

Title:
  Ubuntu 22.04 boot stuck in initramfs, when installed with zfs
  encryption

Status in Ubuntu CD Images:
  Fix Released
Status in initramfs-tools package in Ubuntu:
  Invalid
Status in zfs-linux package in Ubuntu:
  Fix Released

Bug description:
  Hi,

  I just installed the latest Ubuntu desktop from iso file
  ubuntu-21.10-desktop-amd64.iso inside of VMWare workstation. I chose
  ZFS and native ZFS encryption of the filesystem. The installation went
  fine. Everything worked as expected.

  Then I upgraded the packages to the latest version via the Software
  updater. After reboot I'm stuck in the initramfs prompt. The following
  command fails:

  mount -o zfsutil -t zfs rpool/ROOT/ubuntu_gtw63h /root//

  Permission denied.

  And the system never asks me for the password to unlock the root fs.

  So, I'm guessing that there is something wrong with the new initramfs
  disk: initrd.img-5.13.0-27-generic

  When I reboot and select the previous version in grub:
  initrd.img-5.13.0-27-generic, the system asks for the password and
  boots without a problem.

  Thanks.

  To summarize:

  1. Installed new VM using the Ubuntu iso image. Chose ZFS native encryption. 
Minimal install.
  2. As soon as the system came up, I hit the update/upgrade prompt. Rebooted 
and failed to boot the new version.

  I didn't customize anything or installed anything extra.

  root@ubud01:/var# lsb_release -rd
  Description:  Ubuntu 21.10
  Release:      21.10

  root@ubud01:/var# dpkg -l | grep zfs
  ii  libzfs4linux                               2.0.6-1ubuntu2                 
            amd64        OpenZFS filesystem library for Linux
  ii  zfs-initramfs                              2.0.6-1ubuntu2                 
            amd64        OpenZFS root filesystem capabilities for Linux - 
initramfs
  ii  zfs-zed                                    2.0.6-1ubuntu2                 
            amd64        OpenZFS Event Daemon
  ii  zfsutils-linux                             2.0.6-1ubuntu2                 
            amd64        command-line tools to manage OpenZFS filesystems

  root@ubud01:/var# dpkg -l | grep init
  ii  busybox-initramfs                          1:1.30.1-6ubuntu3.1            
            amd64        Standalone shell setup for initramfs
  ii  cryptsetup-initramfs                       2:2.3.6-0ubuntu1               
            all          disk encryption support - initramfs integration
  ii  gnome-initial-setup                        40.4-1ubuntu1                  
            amd64        Initial GNOME system setup helper
  ii  init                                       1.60build1                     
            amd64        metapackage ensuring an init system is installed
  ii  init-system-helpers                        1.60build1                     
            all          helper tools for all init systems
  ii  initramfs-tools                            0.140ubuntu6                   
            all          generic modular initramfs generator (automation)
  ii  initramfs-tools-bin                        0.140ubuntu6                   
            amd64        binaries used by initramfs-tools
  ii  initramfs-tools-core                       0.140ubuntu6                   
            all          generic modular initramfs generator (core tools)
  ii  libatopology2:amd64                        1.2.4-1.1ubuntu3.1             
            amd64        shared library for handling ALSA topology definitions
  ii  libklibc:amd64                             2.0.8-6.1ubuntu2               
            amd64        minimal libc subset for use with initramfs
  ii  lsb-base                                   11.1.0ubuntu3                  
            all          Linux Standard Base init script functionality
  ii  ncurses-base                               6.2+20201114-2build1           
            all          basic terminal type definitions
  ii  sysvinit-utils                             2.96-7ubuntu1                  
            amd64        System-V-like utilities
  ii  xinit                                      1.4.1-0ubuntu3                 
            amd64        X server initialisation tool
  ii  zfs-initramfs                              2.0.6-1ubuntu2                 
            amd64        OpenZFS root filesystem capabilities for Linux - 
initramfs

  root@ubud01:/var# zfs list
  NAME                                               USED  AVAIL     REFER  
MOUNTPOINT
  bpool                                              290M   542M       96K  
/boot
  bpool/BOOT                                         289M   542M       96K  none
  bpool/BOOT/ubuntu_gtw63h                           288M   542M      156M  
/boot
  rpool                                             6.39G  10.6G      192K  /
  rpool/ROOT                                        5.64G  10.6G      192K  none
  rpool/ROOT/ubuntu_gtw63h                          5.64G  10.6G     3.45G  /
  rpool/ROOT/ubuntu_gtw63h/srv                       192K  10.6G      192K  /srv
  rpool/ROOT/ubuntu_gtw63h/usr                       660K  10.6G      192K  /usr
  rpool/ROOT/ubuntu_gtw63h/usr/local                 468K  10.6G      388K  
/usr/local
  rpool/ROOT/ubuntu_gtw63h/var                      1.53G  10.6G      192K  /var
  rpool/ROOT/ubuntu_gtw63h/var/games                 272K  10.6G      192K  
/var/games
  rpool/ROOT/ubuntu_gtw63h/var/lib                  1.52G  10.6G     1.34G  
/var/lib
  rpool/ROOT/ubuntu_gtw63h/var/lib/AccountsService   328K  10.6G      216K  
/var/lib/AccountsService
  rpool/ROOT/ubuntu_gtw63h/var/lib/NetworkManager    404K  10.6G      228K  
/var/lib/NetworkManager
  rpool/ROOT/ubuntu_gtw63h/var/lib/apt              88.1M  10.6G     82.1M  
/var/lib/apt
  rpool/ROOT/ubuntu_gtw63h/var/lib/dpkg             61.7M  10.6G     48.0M  
/var/lib/dpkg
  rpool/ROOT/ubuntu_gtw63h/var/log                  4.84M  10.6G     3.57M  
/var/log
  rpool/ROOT/ubuntu_gtw63h/var/mail                  272K  10.6G      192K  
/var/mail
  rpool/ROOT/ubuntu_gtw63h/var/snap                 2.14M  10.6G     1.72M  
/var/snap
  rpool/ROOT/ubuntu_gtw63h/var/spool                 388K  10.6G      252K  
/var/spool
  rpool/ROOT/ubuntu_gtw63h/var/www                   272K  10.6G      192K  
/var/www
  rpool/USERDATA                                     246M  10.6G      192K  /
  rpool/USERDATA/ja_1ocgwe                           245M  10.6G      221M  
/home/ja
  rpool/USERDATA/root_1ocgwe                         424K  10.6G      272K  
/root
  rpool/keystore                                     518M  11.0G     48.1M  -
  root@ubud01:/var# zfs get encryption rpool/ROOT/ubuntu_gtw63h
  NAME                      PROPERTY    VALUE        SOURCE
  rpool/ROOT/ubuntu_gtw63h  encryption  aes-256-gcm  -

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