The strange thing to me is that before the encrypted home is mounted,
$HOME is perm'd 500.  So not even the owner should be able to write to
it.  This is by design to prevent you from accidentally writing
cleartext data to your home.

Even though that's the case, the failed lightdm login process creates two files 
in the unmounted, read-only home:
 1) .dmrc
 2) .Xauthority

This seems to me like lightdm is doing some funny business as root, and
then chowning this files back over to the user?

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https://bugs.launchpad.net/bugs/823775

Title:
  Cannot login: could not update ICEauthority file .ICEauthority

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