Thanks.  could you try adding -F to the end of that command, i.e.

lxc-create -t ubuntu -n u1-server -f /etc/lxc/local.conf -- -r lucid -a
i386 -b matiasb -F

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https://bugs.launchpad.net/bugs/942862

Title:
  lxc-create failure creating a lucid container in a precise host

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