Upstream 3.2-rc5 contains the following commit which is supposed to fix
this:

commit e5fd47bfab2df0c2184cc0bf4245d8e1bb7724fb
Author: Konrad Rzeszutek Wilk <[email protected]>
Date:   Mon Nov 21 18:02:02 2011 -0500

    xen/pm_idle: Make pm_idle be default_idle under Xen.

This should be in the rebase to rc5 which was done with 3.2.0-4.10. As
far as I can see this should be uploaded already.

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https://bugs.launchpad.net/bugs/881076

Title:
  precise kernels do not boot on ec2 without idle=halt

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