There are some points that should be kept in mind:

* this error is (quite possibly) a result of a race; the tests we usually 
conduct are stress tests -- in this case, we try to allocate a few hundreds of 
volumes in one single sweep -- we are requesting volume creation faster than 
volumes can be created, so we are more prone to the race condition(s).
* files are allocated in *sparse* mode -- so a newly-created 1Gbytes file will 
actually use just a few tens of Kbytes. This means it is much more difficult to 
run out of space (by at least two orders of magnitude).
* if the loop device is not unallocated, then there is a (perhaps higher) 
chance of running out of loop devices -- we have the system preset to allocate 
512 such devices --. But, still, there is an easy bypass: just create more loop 
devices.

-- 
eucalyptus create and delete volumes sometimes fail on lvm commands (POC + ENT 
configs)
https://bugs.launchpad.net/bugs/590929
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