I experienced the same now in the following situation:

 * virtualbox: installation of Puredyne on HD via ubiquity, reboot  and
update to latest Puredyne kernel (2.6.31-6-pure) then reboot leads to
(supposedly) random hangs after "starting init crypto disks [OK]"

 * Lenovo x61: karmic install from scratch with Puredyne kernel
(2.6.31-6-pure) leads to (supposedly) random hangs after "starting init
crypto disks [OK]"

-- 
system hang on "starting init crypto disks [OK]"
https://bugs.launchpad.net/bugs/485858
You received this bug notification because you are a member of puredyne
team, which is the registrant for puredyne-kernel.

Status in Puredyne kernel: Confirmed
Status in Puredyne liveCD/DVD/USB/HD: Incomplete

Bug description:
this has been duplicated on two T43s and i also observed this in some machines 
in access space...
i made a fresh install with automatically log in user and an ext4 partition - i 
was able to log in sometimes but mostly it hangs on
"starting init crypto disks [OK]"
seems erratic - i installed my x41 exactly the same way and have had no problems
i also after install tried a aptitude safe-upgrade but that didn't help

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