The same here.

Original install: ubuntu gnome 16.04.
root fs: btrfs
After upgrading to 16.10 all new (4.8) kernels hanging up with this message.
Tried with 4.9.0-rc4, the problem still exists.
Boots correctly with kernel 4.4.0-43

"Uncommenting #GRUB_TERMINAL=console fixed it." - for me it has not
solved the problem.

Thank you.

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https://bugs.launchpad.net/bugs/1636034

Title:
  Kernel panic - not syncing: VFS: Unable to mount root fs

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