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In you log their is the following

2013-01-20 08:56:37 2473 TRACE nova.openstack.common.rpc.amqp raise exception.ImageTooLarge() 2013-01-20 08:56:37 2473 TRACE nova.openstack.common.rpc.amqp ImageTooLarge: Image is larger than instance type allows

It would seem you root disk is to large for the flavor you are using, I suggest to get things working that you remove, images, instances and then use a small distro to get things working.

Can you do the following

1) Delete all instances. 2) Delete all images. 3) Delete all you logs. 4) let things run for a while, capture logs. This is so we can see if their are any other problems other then image size. 5) Upload small VM image (Use a small distro image to begin with). 6) Create a instance from image.

If all dose not go well capture logs and post here again.

You can modify the settings later to increase the allowed root disk size when all is working.