Same issue when upgrading from Ubuntu 14.04 to 16.04.  Note - using LUKS
encryption and have nVidia video.

Did a fresh install of Ubuntu 16.04 using LUKS encryption which
installed 4.4.0-21 and login worked until I ran upgrades (which
installed 4.4.0-34).  Now have the cannot type characters into the box
to unlock the disk problem again.

Notes:

* If I boot in recovery mode I can enter password, just not with a normal boot.
* If a change my /etc/grub/default to be "quite nosplash", I can enter password 
in text mode.

System info:
* System76 Leopard Extreme
* 1 GB nVidia GeForce GTX 750

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https://bugs.launchpad.net/bugs/1386005

Title:
  Password not accepted graphical boot for encrypted root system

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