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I got this error in the nova logs of compute node while creating a new instance in openstack liberty. It was because neutron was not able to convey nova that a virtual interface has been created. I made sure I had the following conf in nova section of neutron.conf on controller node so that neutron identifies where the nova service is and conveys of the networking events.

[nova]
auth_url = http://controller:35357
auth_plugin =password
project_domain_id = default
user_domain_id = default
region_name = RegionOne
project_name = service
username = nova
password = nova