Getting an error when trying to create an instance through both Horizon and commandline which I think I have boiled down to a neutron issue:

nova --debug boot --flavor m1.tiny --image cirros-0.3.0 --nic net-id=86974ee9-16ff-4c25-8ebf-8255aa3fa694 --security-group default --key-name cloudkey demo-instance1

DEBUG (shell:777) The server has either erred or is incapable of performing the requested operation. (HTTP 500) (Request-ID: req-f4e78da5-006b-46d1-8a2f-e6242b07bcb7)
Traceback (most recent call last):
  File "/usr/lib/python2.7/dist-packages/novaclient/shell.py", line 774, in main
    OpenStackComputeShell().main(map(strutils.safe_decode, sys.argv[1:]))
  File "/usr/lib/python2.7/dist-packages/novaclient/shell.py", line 710, in main
    args.func(self.cs, args)
  File "/usr/lib/python2.7/dist-packages/novaclient/v1_1/shell.py", line 433, in do_boot
    server = cs.servers.create(*boot_args, **boot_kwargs)
  File "/usr/lib/python2.7/dist-packages/novaclient/v1_1/servers.py", line 871, in create
    **boot_kwargs)
  File "/usr/lib/python2.7/dist-packages/novaclient/v1_1/servers.py", line 534, in _boot
    return_raw=return_raw, **kwargs)
  File "/usr/lib/python2.7/dist-packages/novaclient/base.py", line 152, in _create
    _resp, body = self.api.client.post(url, body=body)
  File "/usr/lib/python2.7/dist-packages/novaclient/client.py", line 286, in post
    return self._cs_request(url, 'POST', **kwargs)
  File "/usr/lib/python2.7/dist-packages/novaclient/client.py", line 260, in _cs_request
    **kwargs)
  File "/usr/lib/python2.7/dist-packages/novaclient/client.py", line 242, in _time_request
    resp, body = self.request(url, method, **kwargs)
  File "/usr/lib/python2.7/dist-packages/novaclient/client.py", line 236, in request
    raise exceptions.from_response(resp, body, url, method)
ClientException: The server has either erred or is incapable of performing the requested operation. (HTTP 500) (Request-ID: req-f4e78da5-006b-46d1-8a2f-e6242b07bcb7)
ERROR: The server has either erred or is incapable of performing the requested operation. (HTTP 500) (Request-ID: req-f4e78da5-006b-46d1-8a2f-e6242b07bcb7)

When I run the command without the --nic option it works as expected:

nova boot --flavor m1.tiny --image cirros-0.3.0 --security-group default --key-name cloudkey demo-instance
+--------------------------------------+-----------------------------------------------------+
| Property                             | Value                                               |
+--------------------------------------+-----------------------------------------------------+
| OS-DCF:diskConfig                    | MANUAL                                              |
| OS-EXT-AZ:availability_zone          | nova                                                |
| OS-EXT-SRV-ATTR:host                 | -                                                   |
| OS-EXT-SRV-ATTR:hypervisor_hostname  | -                                                   |
| OS-EXT-SRV-ATTR:instance_name        | instance-00000007                                   |
| OS-EXT-STS:power_state               | 0                                                   |
| OS-EXT-STS:task_state                | scheduling                                          |
| OS-EXT-STS:vm_state                  | building                                            |
| OS-SRV-USG:launched_at               | -                                                   |
| OS-SRV-USG:terminated_at             | -                                                   |
| accessIPv4                           |                                                     |
| accessIPv6                           |                                                     |
| adminPass                            | 6rCpeTZY7i5n                                        |
| config_drive                         |                                                     |
| created                              | 2014-06-06T18:48:15Z                                |
| flavor                               | m1.tiny (1)                                         |
| hostId                               |                                                     |
| id                                   | e0019d22-0eab-4d7f-970b-3914c32408e4                |
| image                                | cirros-0.3.0 (11681c6e-337e-462f-b051-64613c798837) |
| key_name                             | cloudkey                                            |
| metadata                             | {}                                                  |
| name                                 | demo-instance                                       |
| os-extended-volumes:volumes_attached | []                                                  |
| progress                             | 0                                                   |
| security_groups                      | default                                             |
| status                               | BUILD                                               |
| tenant_id                            | 0d788298788f4128bbb1a6f3a1b39034                    |
| updated                              | 2014-06-06T18:48:16Z                                |
| user_id                              | 1a7896d255cf403a8a6ef4f06834d990                    |
+--------------------------------------+-----------------------------------------------------+

Here is the tail from /var/log/neutron/server.log:

tail /var/log/neutron/server.log
2014-06-06 13:00:37.980 8994 TRACE neutron.api.v2.resource     obj = obj_updater(request.context, id, **kwargs)
2014-06-06 13:00:37.980 8994 TRACE neutron.api.v2.resource   File "/usr/lib/python2.7/dist-packages/neutron/plugins/ml2/plugin.py", line 671, in update_port
2014-06-06 13:00:37.980 8994 TRACE neutron.api.v2.resource     port)
2014-06-06 13:00:37.980 8994 TRACE neutron.api.v2.resource   File "/usr/lib/python2.7/dist-packages/neutron/db/db_base_plugin_v2.py", line 1412, in update_port
2014-06-06 13:00:37.980 8994 TRACE neutron.api.v2.resource     and (changed_device_id or changed_device_owner)):
2014-06-06 13 ...