This seems to be an inotify issue - initctl isn't being notified of the new configuration. If I run:
$ initctl reload-configuration ...then everything works as expected. ** Package changed: openssh (Ubuntu) => linux-meta (Ubuntu) -- You received this bug notification because you are a member of Ubuntu Server Team, which is subscribed to openssh in Ubuntu. https://bugs.launchpad.net/bugs/1015348 Title: openssh-server package does not start sshd on a live CD boot To manage notifications about this bug go to: https://bugs.launchpad.net/ubuntu/+source/linux-meta/+bug/1015348/+subscriptions -- Ubuntu-server-bugs mailing list Ubuntu-server-bugs@lists.ubuntu.com Modify settings or unsubscribe at: https://lists.ubuntu.com/mailman/listinfo/ubuntu-server-bugs