I ran into further issues having followed the http://docs.openstack.org/icehouse/install-guide/install/apt/content/neutron-ml2-controller-node.html (OpenStack Icehouse Neutron Ml2 guide):

this is incorrect in the doco:

core_plugin = ml2

and should be:

core_plugin = neutron.plugins.ml2.plugin.Ml2Plugin

also had to comment out:

#service_plugins = router

which is also in the documentation. (perhaps my install is still broken, still working on it.)

once these changes were made, the following command (also missing from documentation) worked on Ubuntu 14.04:

neutron-db-manage --config-file /etc/neutron/neutron.conf --config-file /etc/neutron/plugins/ml2/ml2_conf.ini upgrade head

i hope this helps someone.