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It seems it's a permission problem. After digging more i noticed nova.conf couldn't be read. Althought chown was set to nova:nova i had to set chmod 777. After that i had to set same chmod for nova-manage.log. I don't understand how did the permissions get screwed up so badly?! I followed the tutorial for installing openstack on ubuntu 14.04. Now i can boot .iso images just fine but can't attach volumes to them. I can attach volumes to instances spawned from any other format but .iso. Also when i try to boot the image with new volume i get an error. In the logs i can see cindefilter not finding any hosts. I need to dig more into this.