We use nova-compute-lxd to run OpenStack "VMs" not as libvirt+QEMU
virtual machines, but as LXD containers. The nova-compute-lxd connects
to the local LXD daemon and creates containers, using a rootfs image
from Glance, and attaching it to networks managed by Neutron (VXLANs in
our case). As far as I know, LXD basically is used as a dumb
"hypervisors".

As images, we use the rootfs images "focal-server-cloudimg-
amd64-root.tar.xz" from https://cloud-images.ubuntu.com/focal/current/.
A daily cron job checks for new images and imports them to Glance. We
actually do run "regular" libvirt+QEMU VMs to. They are set up the same
way, and use the qcow images.

Before the upgrade, the LXD container used "DataSourceOpenStackLocal
[net,ver=2]" data source. I am not aware of any special configuration
needed to make that happen. The containers used DHCP to get their IP
addresses, contacted the metadata server at 169.254.169.254, and
processed the results the same way as the QEMU VMs did.

> To do so, run "cloud-init collect-logs" and upload the resulting
tarball to this bug.

I'll see if I can find a still running container. Most instances were
recently recreated, which failed. But I was able to find a cloud-init
log from a previous instance, that shows the data source as
DataSourceOpenStackLocal, even after the cloud-init package was upgraded
in the running system and after reboots.

** Attachment added: "cloud-init-output.log"
   
https://bugs.launchpad.net/ubuntu/+source/cloud-init/+bug/1959118/+attachment/5557855/+files/cloud-init-output.log

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https://bugs.launchpad.net/bugs/1959118

Title:
  LTS upgrade to v21 breaks in LXD containers in OpenStack (nova-
  compute-lxd)

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