The new iso should not be a problem. However, we saw a lot of problems with grub update couple of weeks ago. It is necessary to run the command before rebooting, else necessitates a chroot and fix it there.
This explains the fix. Still surprised in your case, I did not have any problems with updates and reboot with new iso…
Also see some blacklisting of Nvidia, did you do that? Or was that automatic install.
module_blacklist=nvidia,nvidia_modeset,nvidia_uvm,nvidia_drm,pcspkr nouveau.modeset=1 i915.modeset=1 radeon.modeset=1 nvme_load=yes
Also your boot parameter is entirely different than mine. Perhaps try install first without encryption, or if you do run the grub-install before reboot but right after update if you can. Curious if it is really grub related.