I had this problem too and fixed it by setting the wait time-out to a larger
value: --wait

For example, in "stand alone" mode with default values, a time out of 480
seconds worked for me:

$ cd spark-0.9.1/ec2
$ ./spark-ec2 --key-pair=XXXX --identity-file=XXXX --instance-type=r3.large
--wait=480  launch XXXX




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