For me an easier fix worked.
It turns out that this whole ordeal is caused by Google Now launcher not starting. Some suggest trying someone calling you, which wouldn't work if you can't enter your PIN number.
Using ADB however, you can open up settings and do some things that could fix the problem.
adb shell am start -n com.android.settings/.Settings
In the settings you can go to 'applications' there swipe right to the 'disabled' category - where you can find 'Google Search' and you can enable it again.One can probably install an alternative launcher - and if that works the disabling of the google launcher (aka 'Google Search') should not be a problem.
http://android.stackexchange.com/a/82049
This will fix the non-working home button and notifications not showing up.
adb shell am start -n com.google.android.setupwizard/.SetupWizardTestActivity
Complete the wizard, stuff works again.http://forum.xda-developers.com/google-nexus-5/general/guide-dirty-flash-lpv-to-lrx21o-t2940358/post56756143#post56756143[1]