Your description is very meandering and so it is difficult to discern what bug you are trying to describe. Let's try to focus it up. If I understand you correctly, you had no problem at all without truecrypt, but with truecrypt, you had difficulty installing grub to a partition instead of the MBR, and had to disable the vt.handoff boot option in order to get the luks prompt, and still gnome won't load?
Your description is very meandering and so it is difficult to discern what bug you are trying to describe. Let's try to focus it up. If I understand you correctly, you had no problem at all without truecrypt, but with truecrypt, you had difficulty installing grub to a partition instead of the MBR, and had to disable the vt.handoff boot option in order to get the luks prompt, and still gnome won't load?