Physical file system vs layered file system for encryption


Given all of the difficulties dealing with memory mapped files and changing
buffer sizes, I am wondering if anyone has ever considered using a physical
file system to handle encryption at a block level. The idea would be to lay
down meta data on to a reserved area of a formated disk. The meta data would
contain the encryption keys as well the mapping information to track the
actual block locations to the requested block location. the scheme would use
a disk filter to mange the meta data and maybe an offline utility to put
down the orginal meta data.

Has any one tried this before? What are the pit falls?