I see as well from the attached kernel information that you're using the
nouveau driver, and that when booted *without* vt.handoff, the nouveau
driver has initialized without problems.  Could you reboot with
vt.handoff=7, cycle VTs as needed to get to the decryption prompt, boot
and attach to the bug report the dmesg output from such a boot?  Would
like to compare the two.

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https://bugs.launchpad.net/bugs/942846

Title:
  encrypted install fails to boot as long as vt.handoff=7 is used

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