Confirmed. Having same issue.

dpkg --configure -a
Setting up linux-image-4.4.0-57-generic (4.4.0-57.78) ...
Running depmod.
update-initramfs: deferring update (hook will be called later)
The link /initrd.img is a dangling linkto /boot/initrd.img-4.4.0-77-generic
Examining /etc/kernel/postinst.d.
run-parts: executing /etc/kernel/postinst.d/apt-auto-removal 4.4.0-57-generic 
/boot/vmlinuz-4.4.0-57-generic
run-parts: executing /etc/kernel/postinst.d/initramfs-tools 4.4.0-57-generic 
/boot/vmlinuz-4.4.0-57-generic
update-initramfs: Generating /boot/initrd.img-4.4.0-57-generic
/usr/sbin/mkinitramfs: 66: .: Can't open /etc/initramfs-tools/initramfs.conf
update-initramfs: failed for /boot/initrd.img-4.4.0-57-generic with 2.
run-parts: /etc/kernel/postinst.d/initramfs-tools exited with return code 2
Failed to process /etc/kernel/postinst.d at 
/var/lib/dpkg/info/linux-image-4.4.0-57-generic.postinst line 1052.
dpkg: error processing package linux-image-4.4.0-57-generic (--configure):
 subprocess installed post-installation script returned error exit status 2
Setting up linux-image-4.4.0-77-generic (4.4.0-77.98) ...
Running depmod.
update-initramfs: deferring update (hook will be called later)
The link /initrd.img is a dangling linkto /boot/initrd.img-4.4.0-57-generic
Examining /etc/kernel/postinst.d.
run-parts: executing /etc/kernel/postinst.d/apt-auto-removal 4.4.0-77-generic 
/boot/vmlinuz-4.4.0-77-generic
run-parts: executing /etc/kernel/postinst.d/initramfs-tools 4.4.0-77-generic 
/boot/vmlinuz-4.4.0-77-generic
update-initramfs: Generating /boot/initrd.img-4.4.0-77-generic
/usr/sbin/mkinitramfs: 66: .: Can't open /etc/initramfs-tools/initramfs.conf
update-initramfs: failed for /boot/initrd.img-4.4.0-77-generic with 2.
run-parts: /etc/kernel/postinst.d/initramfs-tools exited with return code 2
Failed to process /etc/kernel/postinst.d at 
/var/lib/dpkg/info/linux-image-4.4.0-77-generic.postinst line 1052.
dpkg: error processing package linux-image-4.4.0-77-generic (--configure):
 subprocess installed post-installation script returned error exit status 2
Errors were encountered while processing:
 linux-image-4.4.0-57-generic
 linux-image-4.4.0-77-generic

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https://bugs.launchpad.net/bugs/1667512

Title:
  update-initramfs hangs on upgrade, dpkg unusable, unbootable system

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