I guess I need to retract my last post.  The first few times, it behaved
as I described above, but now it seems to be completely random.  Most of
the time I can only get in by doing the recovery mode grub option, then
trying to type in my password unsuccessfully a few times, dropping to a
root shell, mounting the filesystem myself, and then resuming the boot.
Anything else is severely unreliable, and it seems it is because the
stdin doesnt get to the cryptsetup process looking for the password.  It
seems that the latest watershed + cryptsetup packages do not solve the
problem, in my case at least.  I'm not sure what information I can
provide to help pinpoint the problem, but let me know if I can be of any
further help.

-- 
cryptsetup init scripts are redundant and can break the boot
https://bugs.launchpad.net/bugs/473615
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