The Windows 10 Anniversary update causes issues with encrypted HDDs for some users. After installing the update the HDD can no longer be decrypted and Windows 10 is asking users for a recovery key.
The affected feature it Bitlocker, a feature that that exists since Windows Vista and adds full disk encryption. After users restart their computer when they’ve upgraded to Windows 10 Anniversary Update, Bitlocker reports it can’t decrypt the drive and asks for a recovery key. This key can be stored in a Microsoft account, in a file or printed on paper and is used to access the disk when normal access fails. Unfortunately entering the recovery key sometimes doesn’t work as well.
According to Microsoft the issue is caused by an incompatibility of the Windows Hyper-V (used to create Virtual Machines) and a possible issue with Device Guard which is an additional protection layer against malware in Windows 10.
Only users of Windows 10 Professional and Enterprise are affected as these are the only Windows 10 versions with Bitlocker and Hyper-V.
Microsoft is working on a fix which it hopes to release through Windows Update on the 23rd of August. Till then the company has posted several workarounds (bottom of page).