This bug was fixed in the package cloud-init - 0.6.1-0ubuntu16
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cloud-init (0.6.1-0ubuntu16) oneiric; urgency=low
* catch up with trunk at revision 439
* warn on failure to set hostname (LP: #832175)
* properly wait for all static interfaces to be up before
cloud-init run
I'm marking this "Won't Fix".
A solution to this problem would be to insert the key at the beginning of
.ssh/authorized_keys. However, that would break the following use case:
* launch instance
* edit /root/.ssh/authorized_keys to allow direct root login
* rebundle
Because that seems like a