Have the same problem since yesterday. I'm having 4.4.0-47 4.4.0-59 4.4.0-62 4.4.0-64 installed. I was trying to upgrade my system yesterday and 4.4.0-66 was about to be installed, but it hangs on update-initramfs or to be more precise it's hanging on "Building cpio" when running update-initramfs -u -v

Problem is related probably to last 2 upgrades which I did.
Here is the list of packages installed yesterday (aptitude):

[REMOVE, NOT USED] ubuntu-core-launcher:amd64 2.22.6
[UPGRADE] snapd:amd64 2.22.3 -> 2.22.6
[UNCONFIGURED] linux-generic:amd64 4.4.0.66.70
[UNCONFIGURED] linux-headers-4.4.0-66:amd64 4.4.0-66.87
[UNCONFIGURED] linux-headers-4.4.0-66-generic:amd64 4.4.0-66.87
[UNCONFIGURED] linux-headers-generic:amd64 4.4.0.66.70
[UNCONFIGURED] linux-image-4.4.0-66-generic:amd64 4.4.0-66.87
[UNCONFIGURED] linux-image-extra-4.4.0-66-generic:amd64 4.4.0-66.87
[UNCONFIGURED] linux-image-generic:amd64 4.4.0.66.70
[UNCONFIGURED] linux-libc-dev:amd64 4.4.0-66.87
[UNCONFIGURED] lxd:amd64 2.0.9-0ubuntu1~16.04.2
[UNCONFIGURED] lxd-client:amd64 2.0.9-0ubuntu1~16.04.2
[UNCONFIGURED] mdadm:amd64 3.3-2ubuntu7.2
[UNCONFIGURED] snap-confine:amd64 2.22.6
[UNCONFIGURED] ubuntu-snappy-cli:amd64 2.22.6

here is the list of previous upgrade (apt):

Start-Date: 2017-02-21  23:48:52
Commandline: apt upgrade
Install: linux-headers-4.4.0-64:amd64 (4.4.0-64.85, automatic), linux-image-4.4.0-64-generic:amd64 (4.4.0-64.85, automatic), linux-image-extra-4.4.0-64-generic:amd64 (4.4.0-64.85, automatic), linux-headers-4.4.0-64-generic:amd64 (4.4.0-64.85, automatic)
Upgrade: lxc-common:amd64 (2.0.6-0ubuntu1~ubuntu16.04.2, 2.0.7-0ubuntu1~16.04.1), libssh2-1:amd64 (1.5.0-2, 1.5.0-2ubuntu0.1), libdns-export162:amd64 (1:9.10.3.dfsg.P4-8ubuntu1.4, 1:9.10.3.dfsg.P4-8ubuntu1.5), libisccfg140:amd64 (1:9.10.3.dfsg.P4-8ubuntu1.4, 1:9.10.3.dfsg.P4-8ubuntu1.5), linux-headers-generic:amd64 (4.4.0.62.65, 4.4.0.64.68), linux-libc-dev:amd64 (4.4.0-62.83, 4.4.0-64.85), linux-image-generic:amd64 (4.4.0.62.65, 4.4.0.64.68), snapd:amd64 (2.21, 2.22.3), bind9-host:amd64 (1:9.10.3.dfsg.P4-8ubuntu1.4, 1:9.10.3.dfsg.P4-8ubuntu1.5), snap-confine:amd64 (2.21, 2.22.3), libisc160:amd64 (1:9.10.3.dfsg.P4-8ubuntu1.4, 1:9.10.3.dfsg.P4-8ubuntu1.5), lxd:amd64 (2.0.8-0ubuntu1~ubuntu16.04.2, 2.0.9-0ubuntu1~16.04.1), liblxc1:amd64 (2.0.6-0ubuntu1~ubuntu16.04.2, 2.0.7-0ubuntu1~16.04.1), libisc-export160:amd64 (1:9.10.3.dfsg.P4-8ubuntu1.4, 1:9.10.3.dfsg.P4-8ubuntu1.5), liblwres141:amd64 (1:9.10.3.dfsg.P4-8ubuntu1.4, 1:9.10.3.dfsg.P4-8ubuntu1.5), ubuntu-core-launcher:amd64 (2.21, 2.22.3), libdns162:amd64 (1:9.10.3.dfsg.P4-8ubuntu1.4, 1:9.10.3.dfsg.P4-8ubuntu1.5), ubuntu-snappy-cli:amd64 (2.21, 2.22.3), libisccc140:amd64 (1:9.10.3.dfsg.P4-8ubuntu1.4, 1:9.10.3.dfsg.P4-8ubuntu1.5), libbind9-140:amd64 (1:9.10.3.dfsg.P4-8ubuntu1.4, 1:9.10.3.dfsg.P4-8ubuntu1.5), linux-generic:amd64 (4.4.0.62.65, 4.4.0.64.68), lxd-client:amd64 (2.0.8-0ubuntu1~ubuntu16.04.2, 2.0.9-0ubuntu1~16.04.1), lxcfs:amd64 (2.0.5-0ubuntu1~ubuntu16.04.1, 2.0.6-0ubuntu1~16.04.1)
End-Date: 2017-02-21  23:49:31


I'm able to update initrd.img file using following command, it doesnt hang on that "Building cpio":
mkinitramfs -v -c -k 4.4.0-66-generic -o /tmp/initrd.img.tmp

I'm not planning to restart server during next few weeks, so I'm unable to check if it's running. Right now I'm working on 4.4.0-62.