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
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