This sounds a lot like what happened to me when the "fix" for this
defect was released:
https://bugs.launchpad.net/ubuntu/+source/openssh/+bug/687535

I had to roll back to 5.3p1-3ubuntu4 to be able to restart Xen based
Lucid instances and have sshd restart reliably.

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https://bugs.launchpad.net/bugs/719833

Title:
  ssh upstart job fails to actually bring up ssh

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