loop-aes boot failure

Hello,

I'm having trouble getting loop-aes to boot an encrypted hard disk.  I
do my testing using qemu, because I don't have to burn CDs over and
over if things go wrong.  At boot time I get about 6-8 pf these errors
repeated on the system console:

Command "/lib/losetup -e AES256 -I 0 -K /lib/rootkey.gpg -G /lib
/dev/loop5 /dev/hda" returned error.

I am not able to enter a password and the system halts after this
message is displayed.  You can see how this happens if you install
qemu and boot from the ISO image in question.  I've uploaded the ISO
image here:

http://pub.temerity.net/setup.iso.gz

There is a dummy rootkey.gpg included in the image, along with my
ISOLINUX configuration, build-initrd.conf, and config.gz from kernel
2.6.25.4.  Since the system never gets to a point where the hard disk
is used, you can generate a blank qemu disk image and use the above
ISO to boot with the following qemu commandline:
/usr/bin/qemu \
	-alt-grab \
	-hda image.raw \
	-m 512 \
	-soundhw es1370 \
	-localtime \
	-usb -usbdevice tablet \
	-net none \
	-cdrom setup.iso \
	-boot d

I've spent about 25 hours over two weekends troubleshooting this
problem and am at my wit's end... can someone suggest where I've gone
wrong?

TIA

Mike

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Linux-crypto:  cryptography in and on the Linux system
Archive:       http://mail.nl.linux.org/linux-crypto/