I have this exact issue with the bitnami cloud joomla image.

i686 GNU/Linux
Ubuntu 10.04.2 LTS
*** Welcome to the BitNami Joomla! Stack 1.5.23-0 ***
*** Please visit http://bitnami.org/faq/cloud_images

It fails installing the amazon ec2 tools, at the point of installing
openjdk. Machine hangs, reboot from AWS console the only solution.
Rebooted image unstable and in a partially installed state. I can't back
it up to S3 without installing the tools, and I cant install the tools
to back it up.

Pretty disappointing, given this is my first exploration of using EC2
for some light content management with the free instance and backing it
up is all I need to do before going live and seeing how it goes.

Just to echo #37 above that this is surprisingly low priority given it
has been around for months and will hit most free tier AWS users
experimenting with the platform.

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https://bugs.launchpad.net/bugs/634487

Title:
  t1.micro instance hangs when installing java

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