UPDATE: my issue is resolved; it was related to not having sufficient cephx auth set for cinder and nova ceph clients. For others that might encounter this problem, here is my ceph auth list:

arcuser@arccloud01:~$ sudo ceph auth list installed auth entries:

mds.arccloud01 key: xxx caps: [mds] allow caps: [mon] allow profile mds caps: [osd] allow rwx osd.0 key: xxx caps: [mon] allow profile osd caps: [osd] allow * osd.1 key: xxx caps: [mon] allow profile osd caps: [osd] allow * osd.2 key: xxx caps: [mon] allow profile osd caps: [osd] allow * client.admin key: xxx caps: [mds] allow * caps: [mon] allow * caps: [osd] allow * client.bootstrap-mds key: xxx caps: [mon] allow profile bootstrap-mds client.bootstrap-osd key: xxx caps: [mon] allow profile bootstrap-osd client.bootstrap-rgw key: xxx caps: [mon] allow profile bootstrap-rgw client.cephadmin key: xxx caps: [mds] allow rw path=/volumes/_nogroup/1cd9bc07-e883-4e90-8e88-6ee46b4f04de caps: [mon] allow r caps: [osd] allow rw pool=cephfs_data namespace=fsvolumens_1cd9bc07-e883-4e90-8e88-6ee46b4f04de client.cindervolumes key: xxx caps: [mon] allow r caps: [osd] allow class-read object_prefix rbd_children, allow rwx pool=cindervolumes, allow rwx pool=glanceimages, allow rwx pool=novapool, allow rwx pool=manila client.glanceimages key: xxx caps: [mon] allow r caps: [osd] allow class-read object_prefix rbd_children, allow rwx pool=glanceimages client.manila key: xxx caps: [mds] allow * caps: [mon] allow r, allow command "auth del", allow command "auth caps", allow command "auth get", allow command "auth get-or-create" caps: [osd] allow rw client.novapool key: xxx caps: [mon] allow r caps: [osd] allow class-read object_prefix rbd_children, allow rwx pool=cindervolumes, allow rwx pool=glanceimages, allow rwx pool=novapool, allow rwx pool=manila

Hello jsm, I have a very similar issue and just saw your post... I was about to post this:

Hello, I have working Mitaka deployment on Ubuntu 16.04. I am using Ceph RBD backed Nova Ephemeral storage, Cinder volumes, and Glance Images. Neutron is configured for provider network using linux bridge agent. Everything is working correctly, except I am unable to attach Cinder volume to Nova instance. I have googled several similar bugs, but all of them are old and give inconclusive solutions. Upon attempting nova volume attach, it gives a response, but logs show an internal error, and the attach is failed. The error I am getting:

libvirtError: internal error: unable to execute QEMU command 'device_add': Property 'virtio-blk-device.drive' can't find value 'drive-virtio-disk1'

I should add that this only occurs on a running instance. On a shutdown instance, it works fine. Is this the same as your issue? Do I have something misconfigured? Perhaps we can help each other... From nova-compute.log:

ERROR nova.virt.block_device [req-5c342ce8-fc35-4245-8bff-5731859257c3 996a74a0b9de4473b64cf1d94ff38c9f 47a164e5de59452987ee2fc215169e49 - - -] [instance: fd3620de-6c48-4019-

a0c6-d6bcc084f095] Driver failed to attach volume 009579fd-52b7-46e3-8a51-c09bef28852d at /dev/vdb
 Traceback (most recent call last):
   File "/usr/lib/python2.7/dist-packages/nova/virt/block_device.py", line 279, in attach
     device_type=self['device_type'], encryption=encryption)
   File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/driver.py", line 1359, in attach_volume
     self._disconnect_volume(connection_info, disk_dev)
   File "/usr/local/lib/python2 ...

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