@Stéphane, I have now followed your steps from commant #38 (was using the 
official ubuntu image before with cloud-init and that does a initrd-less boot 
first which is successful for me) but this does not show me the error you see 
either. And a break=top does work (with some complaints about tty1 which is 
expected due to the missing efi-fb).
I double-checked the initramfs compression setting and that is lz4.

This is rather weird. I will try on a different hw but that really
should not be relevant. For double checking: which LXD version are you
using? I am on the focal/stable/4.0 stream:

lxd                4.0.1            15682  4.0/stable/…     canonical✓
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https://bugs.launchpad.net/bugs/1873809

Title:
  Make linux-kvm bootable in LXD VMs

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