I seem to be experiencing the same bug, but my home folder ISN'T encrypted.
I set my wallpaper to one in my pictures folder but I get the default wallpaper 
shown when i'm at lightdm.
however, if I set my wallpaper to one of the default ones, it changes properly.

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https://bugs.launchpad.net/bugs/944862

Title:
  Non-default wallpaper does not display in lightdm with encrypted home
  directory

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