I can't reproduce this on precise with the ubuntu-lxc daily ppa, on 3.2
kernel.

Could you try installing ppa:ubuntu-lxc/daily and see if that fixes it
for you?

It's possible this is a bug in the backport version only, that the newer
kernel is doing something unexpected, or that something is wrong in the
container itself.  I don't see anything in the debug output,
unfortunately, to help pin it down.

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https://bugs.launchpad.net/bugs/1253669

Title:
  unable to launch lxc application containers when dropping cap_sysadmin

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