There is kind of a workaround (though slow). The reboot must be
initiated from outside (either the web interface or the ami tools ec2
-reboot-instances) and one has to wait 5 minutes in that case (this is a
timeout of the xen commands). After that the instance comes up again.

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https://bugs.launchpad.net/bugs/727814

Title:
  [Maverick] Reboot of linux-virtual hangs on EC2

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