Is there another dhcp server running on the network?

Could you post the output of the console of the instance once it has
started?

** Changed in: eucalyptus (Ubuntu)
   Importance: Undecided => Low

** Changed in: eucalyptus (Ubuntu)
       Status: New => Incomplete

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Default UEC install using 1 pc 4 CLC, CC, Walrus etc & 1 NC - VM subnet mask is 
created as 255.255.255.255 - unreachable by a 192.168.1.x 255.255.255.0 class C 
subnet
https://bugs.launchpad.net/bugs/577237
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