I have the same problem. My device is encrypted too. When I add 'nomodeset', the systems stops at a later stage, while determining the root device. I don't even get asked for the password to encrypt the volume.
>> Determining root device...
!! Block device /dev/mapper/vg_shadow-lv_root is not a valid root device...
Afterwards I get asked to file in a bug report with a shown massage, which begins with
"Kernel panic - not syncing: Attempted to kill init! exitcode=0x00000100"
I dont't even get as far as dontregister. If I'd have a console I could just backup my home directory an reinstall the whole system.
Has anyone any ideas?
Edit: I hve that problem since I updated to Kernel 3.7.0 yesterday. Before everything was running fine.
Edit No. 2:
Well... while trying to get to my encrypted home folder on my encryped harddisk, I accidentally killed the file system. So the boot problem should be fixed after reinstalling the system.
If you are new to Linux or new to Sabayon Linux and just not sure where to post, here ya go. Post without fear of being told to RTFM
I grabbed the 3.9.10-3 kernel update today, and I am no longer having any problems. Hooray! I was able to revert my grub command and am not blacklisting radeon any more. Thanks to everyone who worked on it in package land.