a workaround that helps is to create a lts.conf and enable sound
(SOUND=True), thats avoids the race condition that causes this bug ...

could you try something that appears to be the real fix? apparently the
usplash initscript needs to be called with the start paramater to stop
...

so change the line that reads 
/etc/init.d/usplash stop
to be 
/etc/init.d/usplash start
in the /opt/ltsp/i386/etc/init.d/ltsp-client file
and see if that helps ...

-- 
No ldm login on the thinclient
https://launchpad.net/bugs/39294

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