no instance data found in start-local -- cloud-init

We have set it up an Openstack diablo release cloud using two nodes. (2011.3-nova-milestone-tarball:tarmac-20110922115702-k9nkvxqzhj130av2)

Issue is when I start an instance , there is no IP assigned for the new instance. When login to the instance using vncviewer I could see that instance is halting at the time of boot with following messages. After the time out it boots without eth0 network interface.

Message at boot up :

cloud-init start local running:
no instance data found in start-local
cloud-init-nonet waiting 120 seconds for network device
cloud-init-nonet gave up waiting for a network device
ci-info:lo :1 127.0.0.1 255.0.0.0
route info failed
mount event failed
Stopping Handle applying cloud-config [ ok ]

Initially I tried to go ahead with openstack vlan networking but later changed to FlatNetworking. I have only one Network Device on Host server, where every communication go through that network. ( Externally configured dhcp which send ips on 192.168.104.0 range to this environment)

I am getting following warining message on nova-network.log

DEBUG nova.network.manager [cfd0c605-4ab2-4358-a786-b618e724a272 novaadmin proj] network allocations for instance 25 from (pid=4722) allocate_for_instance /usr/lib/python2.7/dist-packages/nova/network/manager.py:437
2011-12-23 15:19:25,537 WARNING nova.network.manager [-] No fixed IPs for instance 25

Further, nova.conf

--dhcpbridge_flagfile=/etc/nova/nova.conf
--dhcpbridge=/usr/bin/nova-dhcpbridge
--network_manager=nova.network.manager.FlatManager
--logdir=/var/log/nova
--state_path=/var/lib/nova
--lock_path=/var/lock/nova
--state_path=/var/lib/nova
--verbose
--s3_host=127.0.0.1
--rabbit_host=192.168.104.67
--cc_host=192.168.104.67
--nova_url=http://192.168.104.67:8774/v1.1/
--fixed_range=192.168.104.0/24
--network_size=8
--routing_source_ip=192.168.104.67
--sql_connection=mysql://nova:<password>@192.168.104.67/nova
--glance_api_servers=192.168.104.67:9292
--image_service=nova.image.glance.GlanceImageService
--iscsi_ip_prefix=192.168.104.
--use_deprecated_auth=true

/etc/network/interface is

auto lo
iface lo inet loopback

auto br100
iface br100 inet static
bridge_ports eth0
bridge_stp off
bridge_maxwait 0
bridge_fd 0
address 192.168.104.67
netmask 255.255.255.0
network 192.168.104.0
broadcast 192.168.104.255
gateway 192.168.104.1

 Further "nova-manage network list" displays following

id IPv4 IPv6 start address DNS1 DNS2 VlanID project uuid
11 192.168.104.0/24 None 192.168.104.3 None None 100 proj None

 Appreciate if someone could help me to resolve this asap.