Can I install OS X lion on a disk that is OS X Extended Journaled encrypted?
Solution 1:
I'd say this is more work than it's worth since Lion clearly isn't expecting to be able to deal with the new encryption scheme. You'd be better off running Lion virtually as that's far less work to do than hacking together the parts of Mountain Lion needed for file vault 2.
The obvious catch-22 is where you need to expose that disk to Lion to get it encrypted in the first place, the recovery HD placed on that drive will allow the installer to prompt for a password and get the CoreStorage keys set up to unlock that volume for the installer.
As mentioned in the comments, it's easiest to connect your encrypted Mac to another Mac in target disk mode to get the Lion installer to run (or better to just image things) - but advanced knowledge of fdesetup and the boot process also might allow other solutions. You will likely have continual problems with automatic rebooting since Lion isn't going to know how to decrypt the boot volume nor will the Recovery Boot image want to hand off to Lion since it's not supposed to know how to handle Filevault 2 drives in the first place.
- http://derflounder.wordpress.com/2012/07/25/using-fdesetup-with-mountain-lions-filevault-2/
Solution 2:
I tried to install it and it is not possible or simply not straight forward to do.
I tried it on a new MBA 2011 and a 2009 MacBook Pro. The installer will let you install lion on the newly encrypted hard drive. However it will not boot.
On the MBA air you will get the below. The Universal No Sign.
It was also very difficult to fix the install on the encrypted drive.
The new MBA Air only has internet recovery, somehow it cannot read the external hard drive or flash disk you installed OS X lion (from installesd.dmg). This is a big pain.
To fix the encrypted HD issue you got again use Disk Utility to reformat it in to Os X extended Journaled .. only.
If your lucky the install should go smooth. However if you get an install error, saying you need to reinstall OS X.
You need to reset the P-R ram.
Turn off the computer,
Hold down “Command”, “Option”, “P” and “R” on the keyboard,
Turn on the computer,
Keep holding down the keys until the computer restarts itself again (maybe ten or fifteen seconds at most),
Release the keys after the computer has restarted again.
All in all. I don't recommend you try to format your boot able hard drive to be encrypted. OS X has a security option that does that now. Encrypts/Decrypts files on the fly.
If someone has successfully been able to format their hard-drive to be extended journaled encrypted and be able to boot and install lion. Please let me know the instructions.
Otherwise don't do it, it is a pain to try fix once you try to format your drive to be encrypted and try to install lion on it.