Public bug reported:

This happens on cloud-init form 12.10 and 13.04. Cloud-init on 12.04 works 
perfectly.
Cloud-init gets called by init, but does not run.
If I try to manually start cloud-init with the upstart scripts, the following 
shows:

# start cloud-init
start: Job failed to start

If I run /usr/bin/cloud-init init , everything works

If I the folliwing wrapper, everything works as well:

/usr/bin/cloud-init:

#!/bin/bash
/usr/bin/cloud-init.real $1 $2 $3 $4

** Affects: cloud-init (Ubuntu)
     Importance: Undecided
         Status: New

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Server Team, which is subscribed to cloud-init in Ubuntu.
https://bugs.launchpad.net/bugs/1163536

Title:
  Cloud-init does not run from init, but runs when started manually

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