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.