I manage to figure out what was wrong.

I found out that snapd had stuck on auto-refresh "core", (ran sudo snap
changes). It was stuck since yesterday. Thus the lxd snap broke when
installed.


What I did to fix it.
* Aborted the autorefresh (sudo snap abort <id>)
* stopped the snapd service (had to kill all the snapd processes)
* started snapd again
The first time when snapd restarted, it got stuck again.

Once again...
* Aborted the autorefresh (sudo snap abort <id>)
* stopped the snapd service (had to kill all the snapd processes)
* started snapd again
* Ran sudo snap connect lxd:lxd-support core:lxd-support (to fix the broken lxd 
snap)

Then I ran apt-get install lxd again... and it got stuck, could not
terminate the previous lxd service.

* Had to force reboot the computer.

After a restart.

Ran apt-get install lxd again and everything worked as expected.

To continue continue the upgrade, I ran sudo apt upgrade.

Now everything is OK


So, summary. If the snap auto-refresh of "core" is stuck. The upgrade will fail.
Maybe a pre-check that the "core" snap is enabled before starting the 
release-upgrade (at least if lxd is installed)?

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https://bugs.launchpad.net/bugs/1874878

Title:
  Did a "do-release-upgrade" from 18.04 to 20.04 and got an error
  message

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