>From my testing, the bigger the image, the more chances you have of
hitting that error. If I take the lucid image and gradually truncate it,
it starts working when its size is <=430Mb. I also have a 200Mb file
that fails, so its not an absolute size thing.

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Instances block in pending state, and don't start
https://bugs.launchpad.net/bugs/588861
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