Looking back at your first post you want to keep the line saying root='(hd0,
msdos1)' because it is supposed to be the partition number of your /boot
partition. It also seems that update-grub does find the necessary files, so I
agree that it is probably a problem with initramfs.
As to automatically running the commands on comment #15, I'm not familiar
with busybox. If it is possible to run scripts then writing one would be a
solution.
Take a look in /etc/crypttab. It should have a line reading something similar
to:
Lap-root UUID=[UUID of encrypted volume, not UUID of sda5] none luks
If it isn't there, add it. To get the UUID of Lap-root you'll have to mount
it first.
I think those commands you want to run automatically should be run if your
crypttab contains that line, but I'm not sure. Also make sure that your fstab
is configured to mount the encrypted volume as root, not the partition
(/dev/mapper/Lap-root as opposed to /dev/sda5 or the UUID of sda5).
What happened when you ran "update-initramfs -u"?
