I already commented in https://bugs.launchpad.net/snappy/+bug/1574556/comments/5
I posted a log in there.

The fix (and workaround) is to add these lines to the end of the file
/etc/apparmor.d/usr.bin.ubuntu-core-launcher, before the closing bracket
('}'):

    # Workaround https://launchpad.net/bugs/359338 until upstream handles
    # stacked filesystems generally.
    # encrypted ~/.Private and old-style encrypted $HOME
    owner @{HOME}/.Private/ r,
    owner @{HOME}/.Private/** mrixwlk,
    # new-style encrypted $HOME
    owner @{HOMEDIRS}/.ecryptfs/*/.Private/ r,
    owner @{HOMEDIRS}/.ecryptfs/*/.Private/** mrixwlk,

And then reboot OR install the package "apparmor-utils" and run this
command in a terminal:

    sudo aa-enforce /etc/apparmor.d/usr.bin.ubuntu-core-launcher

I'm using this fix and Snappy is now working fine for me.

---

These lines:

    owner @{HOME}/.Private/ r,
    owner @{HOMEDIRS}/.ecryptfs/*/.Private/ r,

are not present in the update done to Yakketty, but it seems they are
needed.

By the way, those lines are also not present in 
/etc/apparmor.d/abstractions/base.
That file is included by the apparmor profiles generated for each snap (but not 
by ubuntu-core-launcher).
Please check this as well. This issue may affect more than just Snappy!

---

I'm on 16.04. Snappy was working fine for me, but this issue appeared a few 
days ago.
So maybe an update broke this?

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https://bugs.launchpad.net/bugs/1592696

Title:
  snaps dont work with encrypted home: failed to create user data
  directory. errmsg: Permission denied

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