I also ran into this problem. I was able to fix it by looking at my
dmesg and realizing that the proprietary ati drivers don't work with the
4.X kernel. I had the ones from ATI installed so when it'd try and boot
up it'd get past the encryption but then the driver would crash.

I solved this by uninstalling my ati drivers and reinstall/reconfiguring
my xorg-server.

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https://bugs.launchpad.net/bugs/1481536

Title:
  "cryptsetup: unknown fstype, bad password or options?" error unlocking
  / decrypting LUKS volume at boot

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