Those of us who did plenty research, still failed and only then resorted to "hacks" remain mystified.no need for any "hacks"
it works, just takes a lot of research
http://bugs.debian.org/cgi-bin/bugreport.cgi?bug=700902
The good news is: live-boot_4.0~a7-1_all.deb, which made experimental only today, actually does work. The fix is also noted in the changelog.
I just tested it using an existing custom wheezy image, booted from a rebuilt initrd containing the new stuff in /lib/live/
You can replace just the initrd in /live of a syslinux-type usb setup, maybe not if you use the less flexible dd method (IMO totally inflexible because the device is then useless for normal data storage)
There is still a problem: if you use "debug" on the cmdline (to get a full boot log) with luks the system will hang early on (and the log can't be saved)