We were able to get this working with the umask still set to 027 by adding the 
libvirt-qemu account to the nova group and adding the nova account to the kvm 
group.  Then a service restart of nova-compute got it working again.  
This is in can anyone has this issue and needs to keep the umask set at 027

On each affected cloud node:

sudo usermod -a -G nova libvirt-qemu
sudo usermod -a -G kvm nova
sudo systemctl restart nova-compute

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https://bugs.launchpad.net/bugs/1967956

Title:
  Permission denied when trying to resize images

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