This bug was fixed in the package cloud-init - 0.7.0-0ubuntu2
---------------
cloud-init (0.7.0-0ubuntu2) quantal; urgency=low
* config-drive: copy metadata entry 'hostname' to 'local-hostname' to fix
config modules (set_hostname) will function as expected (LP: #1061964)
-- Scott Moser <smo...@ubuntu.com> Fri, 05 Oct 2012 11:45:15 -0400
** Changed in: cloud-init (Ubuntu)
Status: In Progress => Fix Released
** Branch linked: lp:ubuntu/cloud-init
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https://bugs.launchpad.net/bugs/1061964
Title:
Config drive ensure local-hostname
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