I've experienced same problem. I assume problem is with some PPA
applications running in python.

I tried @Lubos solution, but result was still same. I've noticed that after 
init 2 there was still running some proceses of my-weather-indicator. (PPA 
https://launchpad.net/my-weather-indicator ). 
After I kill them I was able to finally run upgrade without errors.
sudo do-realease-upgrade
Unfortunatly upgrade stoped at installing python3-minimal package. After 
restart I was able to finish upgrade by
sudo apt-get install -f #to finish python3-minimal
sudo apt-get dist-upgrade #continue upgrade
Now it seems 16.10 upgrade is complete.

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https://bugs.launchpad.net/bugs/1633545

Title:
  PermissionError on upgrading from 16.04 to 16.10

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