I have tried these many times (without lvm+encrypt) and see the hang
until keyboard event on most installs (~80%) if I don't use preseeding.
If I use full preseeding so that I don't have to enter anything after
specifying the kernel boot options with F6, then it hangs less
frequently (25% of installs hang).  This is all with the kvm setup I
mentioned above.

-- 
When selecting LVM Crypt, erase never ends
https://bugs.launchpad.net/bugs/217815
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