Comment 4 for bug 1721988

This problem exist at least since 16.10 and i'm experience it in 17.04 also.

The solution can be found in the comments of the accepted answer here: https://askubuntu.com/questions/809477/keyboard-not-working-with-full-disk-encryption-after-installing-nvidia-drivers-o

Qoute: "It seems to be related to the fact that the nvidia drivers need access to something on the encrypted disk."

Work around:
open /etc/default/grub
and change
GRUB_CMDLINE_LINUX_DEFAULT=”quiet splash”
in the to
GRUB_CMDLINE_LINUX_DEFAULT=””
and
sudo update-grub