Some times, you may face this issue in your KVM hypervisor. This is because libvirt wait for neutron to confirm plugging before boot. This makes the libvirt driver use the instance event mechanism to wait for neutron to confirm that VIF plugging is complete before actually starting the VM. Which will put the vm status to error and in the compute.log you can see the following error.
TRACE nova.compute.manager [instance: 2a9464d0-0fed-423d-b855-a56f7a5f85a9] VirtualInterfaceCreateException: Virtual Interface creation failed
Inorder to prevent this, you have to add the following parametres in the nova.conf of the compute node.
vif_plugging_timeout: 0
And restart the compute Node.
/etc/init.d/openstack-nova-compute restart
The error will disappear.
Tested with Openstack Icehouse, KVM having Kernel 3.18 and a separate node for Neutron.
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