Sounds like you're booting without usplash, then?  there's a serious
problem with mountall and cryptsetup competing for the console output,
yes; the solution is to ensure all boot-time console interaction is
mediated by a single process (plymouthd) supporting both framebuffer and
text frontends.  This is scheduled to be implemented for lucid; for
Ubuntu 9.10, I would suggest installing usplash if you don't already
have it installed, and always booting with the 'splash' option to work
around this issue.

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/etc/init.d startup scripts are not run at boot if bad (or timed-out) non-root 
volume password
https://bugs.launchpad.net/bugs/495714
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