Unfortunately, I wasn't able to reproduce the issue.  I tried with the
alternate CD and also the Kubuntu alternate CD (as I noticed you were
using it in you initial report).  Could you please post the output of
the command:

 $ sudo update-initramfs -v -c -k 3.2.0-24-generic

I guess that its easier to run these commands in your virtualbox
environment.

Also, could you check that if inside the initramfs you've just created
there is a file <RAMFS-ROOTDIR>/conf/conf.d/cryptroot ?  It should
contain two lines if you've installed using the default partitioning
scheme for LVM+encryption:

target=sda5_crypt,source=UUID=<SOME_UUID>key=none,rootdev,lvm=ubuntu-root
target=sda5_crypt,source=UUID=<SOME_UUID>key=none,lvm=ubuntu-swap_1

(<SOME_UUID> should be the same in both lines).

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https://bugs.launchpad.net/bugs/1003309

Title:
  Boot fails after installing updates, error: “cryptsetup: evms_activate
  is not available"

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