In Gutsty doesn't work for me the error I get is this:
exec: 34:  env: not found.
I use luks with keyfiles so commented out this lines in 
/lib//cryptsetup/cryptdisks.functions:
## Always output to console
#stdin=`readlink /proc/self/fd/0`
#if [ "${stdin#/dev/null}" != "$stdin" ] && [ "$ON_VT" != "yes" ]; then
#    exec env ON_VT=yes /usr/bin/openvt -f -c `fgconsole` -w $0 "$@"
#fi
This fixes my configuration but isn't a solution.

Cryptsetup version: 2:1.0.5-1ubuntu3.

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Upstart doesn't activate luks volumes (also non luks) in cryptsetup
https://bugs.launchpad.net/bugs/62751
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