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I don't use lvm/luks (disk encryption) but I'm going to try to help. If I Google the phrase ubuntu 16.04 lvm luks password prompt I get lots of results that look like they could help.
sudo leafpad /etc/default/grub
GRUB_CMDLINE_LINUX_DEFAULT="quiet splash"
GRUB_CMDLINE_LINUX_DEFAULT="quiet"
sudo update-grub2
There are separate sprites you can configure for this in the plymouth Liteboot script. The sprite for the password must have a higher Set z number than the background sprite and the logo sprite both, or any other sprites.
Did you happen to have one successful boot where the password prompt was displayed in plymouth, and then on the next boot quit working? TC
I'm a bit late to this conversation, but the same thing is happening with my Intel SSD setup. The solution for me is simply to hit Esc, which makes the splash screen disappear, unhiding LUSK verbose.