> which means they must have some idea of what they're looking for to begin with and the ability to show that it exists on the encrypted medium to begin with
this is not a pedantic side concern, but is in fact, the key component of the government's ability to compel evidence production. if they cannot show that they know what's on your hard drive, that you control it, and that what's on your hard drive is incriminating, they cannot compel you to decrypt it.
so yeah, if you gave them a bad key and your decryption algo returned garbage, they'd certainly lock you up for contempt (given the aforementioned conditions were true).
That'll be a problem when people really do forget their passphrases. Given that they've been through a lot of excietment, what with getting arrested and maybe jailed for a while, and they're often asked for the passphrase a significant amount of time after the computer is confiscated, that could well happen.