Error spawning when launch instance in dashboard

I have installed openstack essex on a single Ubuntu 12.04 server:
$ uname -a
Linux PoC5 3.2.0-23-generic #36-Ubuntu SMP Tue Apr 10 20:39:51 UTC 2012 x86_64 x86_64 x86_64 GNU/Linux

I ahve installed the nova components as per http://docs.openstack.org/essex/openstack-compute/starter/content/Nova-d1a736.html

The nova compoents show as working;
$ sudo nova-manage service list
2012-06-08 12:12:37 DEBUG nova.utils [req-f1c9e038-50e5-4feb-93e4-6a92ddad6b51 None None] backend <module 'nova.db.sqlalchemy.api' from '/usr/lib/python2.7/dist-packages/nova/db/sqlalchemy/api.pyc'> from (pid=725) __get_backend /usr/lib/python2.7/dist-packages/nova/utils.py:658
Binary Host Zone Status State Updated_At
nova-consoleauth PoC5 nova enabled :-) 2012-06-08 11:12:27
nova-compute PoC5 nova enabled :-) 2012-06-08 11:12:36
nova-network PoC5 nova enabled :-) 2012-06-08 11:12:27
nova-scheduler PoC5 nova enabled :-) 2012-06-08 11:12:28
nova-volume PoC5 nova enabled :-) 2012-06-08 11:12:27
nova-cert PoC5 nova enabled :-) 2012-06-08 11:12:28

When I launch an instance in the dashboard, I get a sttus error for the spwaning rask in the web table.

The ony logged errors I can find are:

$ sudo cat /var/log/nova/nova-compute.log | grep ERROR
2012-06-08 10:58:29 ERROR nova.compute.manager [req-58693ced-c38c-4466-8de0-2b36afea07c6 f6034ec442334fca8fbcd73d8df504ec dd4a5cd309ff4ae2be0460e6968f80c5] [instance: 23c436fe-8251-40bf-b455-3ab9df088455] Instance failed to spawn
2012-06-08 10:58:29 ERROR nova.rpc.amqp [req-58693ced-c38c-4466-8de0-2b36afea07c6 f6034ec442334fca8fbcd73d8df504ec dd4a5cd309ff4ae2be0460e6968f80c5] Exception during message handling

$ sudo cat /var/log/nova/nova-api.log | grep ERROR
2012-06-08 10:58:29 DEBUG nova.api.openstack.common [req-ad8ad2c5-09fd-40d1-99df-b2645ed3308b f6034ec442334fca8fbcd73d8df504ec dd4a5cd309ff4ae2be0460e6968f80c5] Generated ERROR from vm_state=error task_state=spawning. from (pid=4186) status_from_state /usr/lib/python2.7/dist-packages/nova/api/openstack/common.py:96

My nova.conf is

# DATABASE
--sql_connection=mysql://nova:opencloud@192.168.40.205/nova

# LOGS/STATE
--verbose
--logdir=/var/log/nova
--state_path=/var/lib/nova
--lock_path=/run/lock/nova

# RABBITMQ
--rabbit_host=192.168.40.205

# SCHEDULER
--scheduler_driver=nova.scheduler.simple.SimpleScheduler
#--compute_scheduler_driver=nova.scheduler.filter_scheduler.FilterScheduler

# NETWORK
--network_manager=nova.network.manager.FlatDHCPManager
--dhcpbridge_flagfile=/etc/nova/nova.conf
--dhcpbridge=/usr/bin/nova-dhcpbridge
--flat_network_bridge=br100
--fixed_range=192.168.30.0/24
#--floating_range=192.168.40.2/24
--network_size=32
--public_interface=eth0
--flat_interface=eth1
--flat_network_dhcp_start=192.168.30.5
--routing_source_ip=192.168.40.205
#--cc_host=192.168.40.205
--flat_injected=False
--force_dhcp_release

# GLANCE
--image_service=nova.image.glance.GlanceImageService
--glance_api_servers=192.168.40.205:9292

# COMPUTE
--api_paste_config=/etc/nova/api-paste.ini
--nova_url=http://192.168.40.205:8774/v1.1/
--connection_type=libvirt
--libvirt_type=kvm
#--libvirt_type=qemu
--libvirt_use_virtio_for_bridges=true
#--start_guests_on_host_boot=true
#--resume_guests_state_on_host_boot=true
-start_guests_on_host_boot=false
--resume_guests_state_on_host_boot=false

# VNCPROXY
--novnc_enabled=true
--novncproxy_base_url=http://192.168.40.205:6080/vnc_auto.html
--vncserver_proxyclient_address=192.168.40.205
--vncserver_listen=192.168.40.205

# MISC
--allow_admin_api=true
--use_deprecated_auth=false
--auth_strategy=keystone
--root_helper=sudo nova-rootwrap

Does anyone know what is causing this?