I had the same problem after doing a "do-release-upgrade" from 14.04 to 16.04 on October 5, 2016.
The kernel installed by default was 4.4.0-38.
After reading this thread I installed 4.4.0-40.60.
With both 4.4.0-38 and 4.4.0-40.60 I have the problem of $USER being mapped to root instead of to the current user.
I then installed kernel 4.4.0-36 (which I'm using on other VMs that were upgraded a few weeks back) and everything worked just fine.
I had the same problem after doing a "do-release- upgrade" from 14.04 to 16.04 on October 5, 2016.
The kernel installed by default was 4.4.0-38.
After reading this thread I installed 4.4.0-40.60.
With both 4.4.0-38 and 4.4.0-40.60 I have the problem of $USER being mapped to root instead of to the current user.
I then installed kernel 4.4.0-36 (which I'm using on other VMs that were upgraded a few weeks back) and everything worked just fine.