Hi:
I did something akin to this, though the easier way I think. Installed debian from a netinst CD to a USB stick. Made an unencrypted boot partition and an encrypted partition, using LVM. Installed the system to it.
Then ran:
install-grub --recheck /dev/sda
ran fine...
then in grub ran:
root (hd0,0)
setup (hd0)
ran fine...
Then ran update-grub.
Checked the /boot/grub/menu.lst on the stick, is fine.
But upon boot with the USB inserted, the system halts with a Boot Error.
The USB is bootable though, since I checked prior to install by putting a DebianLive image on it, and it would get me to the Grub menu. But here I don't get to the Grub menu.
The system is there, I can mount the lv's by hand etc.
So how can I make the USB bootable properly and get to the Grub menu upon boot?