we have seen this when a failed encryption process (probably on an older version) failed prior and data gets left behind on the first few sectors of the disk. Try the solution in this KB below
http://www.symantec.com/docs/TECH149368
Another option, if you don't have a secondary Mac to use target disk mode with is to boot the Mac OS X installer disc. Use the Disk Utility. Then select the option to "Secure Erase" the entire drive. an erase re-partition of the drive will not wipe out the PGP WDE mbr information that gets left behind.
This should allow you to boot the OS again and re-encrypt. If you still have problems, send me a private message and we can investigate the issue. A copy of your system profile in a RTF format would be helpful in that case as well. You can find how to obtain one here using this online guide:
http://guides.macrumors.com/System_Profiler