I can confirm the same behaviour in 10.04, here is the error I get (and
I will post my config's in next post)

pam_mount(mount.c:64): Errors from underlying mount program:
pam_mount(mount.c:68): mount.crypt: stat /dev/mapper/home_crypt: No such file 
or directory
pam_mount(pam_mount.c:492): mount of /dev/mapper/home_crypt failed
No directory, logging in with HOME=/

-- 
cryptsetup fails to open LUKS partition
https://bugs.launchpad.net/bugs/433051
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