Dan mentioned this was fixed in an upstream branch. But won't make it in
the 1.6.2 branch (lucid).

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

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

** Summary changed:

- No instances started if euca-run-instance is run with a large -n
+ No instances started if euca-run-instance tries to run a number instances 
bigger than the limit (default 29) per security group

** Also affects: eucalyptus
   Importance: Undecided
       Status: New

-- 
No instances started if euca-run-instance tries to run a number instances 
bigger than the limit (default 29) per security group
https://bugs.launchpad.net/bugs/546293
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