Hi,

I also had this problem, no matter if I did an upgrade or a fresh install of 
8.04
What helps me is to boot in recovery mode. I'm asked for the passphrase in 
console mode (instead of the graphical boot screen). I continue with 'resume 
normal boot', and everything seems to be fine.

-- 
Boot with encryption broken after upgrade from 7.10 to 8.04
https://bugs.launchpad.net/bugs/237716
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