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No valid host was found when creating new VM

Hi I spent 3 days trying to figure out "No valid host was found. There are not enough hosts available. " error and I am still not able to determine the root cause. I am running OpenStack Kilo on 3 Xen based VMs [controller, network, and compute node]. When I am trying to create a VM I get the following output in dashboard:

 enter code here
    Message No valid host was found. There are not enough hosts available.
   Code       500
   Details  File "/usr/lib/python2.7/site-packages/nova/conductor/manager.py", line 671, in build_instances        request_spec, filter_properties) File "/usr/lib/python2.7/site-packages/nova/scheduler/utils.py", line 337, in wrapped return func(*args, **kwargs) File "/usr/lib/python2.7/site-packages/nova/scheduler/client/__init__.py", line 52, in select_destinations context, request_spec, filter_properties) File "/usr/lib/python2.7/site-packages/nova/scheduler/client/__init__.py", line 37, in __run_method return getattr(self.instance, __name)(*args, **kwargs) File "/usr/lib/python2.7/site-packages/nova/scheduler/client/query.py", line 34, in select_destinations context, request_spec, filter_properties) File "/usr/lib/python2.7/site-packages/nova/scheduler/rpcapi.py", line 120, in select_destinations request_spec=request_spec, filter_properties=filter_properties) File "/usr/lib/python2.7/site-packages/oslo_messaging/rpc/client.py", line 156, in call retry=self.retry) File "/usr/lib/python2.7/site-packages/oslo_messaging/transport.py", line 90, in _send timeout=timeout, retry=retry) File "/usr/lib/python2.7/site-packages/oslo_messaging/_drivers/amqpdriver.py", line 350, in send retry=retry) File "/usr/lib/python2.7/site-packages/oslo_messaging/_drivers/amqpdriver.py", line 341, in _send raise result

Created Oct. 5, 2015, 6:02 p.m.

My controller is able to see resources:

nova hypervisor-stats
+----------------------+-------+
| Property             | Value |
+----------------------+-------+
| count                | 1     |
| current_workload     | 0     |
| disk_available_least | 48    |
| free_disk_gb         | 48    |
| free_ram_mb          | 15739 |
| local_gb             | 49    |
| local_gb_used        | 1     |
| memory_mb            | 16763 |
| memory_mb_used       | 1024  |
| running_vms          | 1     |
| vcpus                | 6     |
| vcpus_used           | 1     |
+----------------------+-------+

This is what I am seeing in nova-scheduler:

2015-10-05 14:02:05.616 895 WARNING nova.scheduler.host_manager [req-c5339ab5-5f10-412f-9344-749d598b8286 aac6aad372f24298a4705fa3bff60bb2 3ef932af6f884db48dabfc82ba87b3d3 - - -] No compute service record found for host computenode01
2015-10-05 14:02:28.473 895 WARNING nova.scheduler.host_manager [req-c5339ab5-5f10-412f-9344-749d598b8286 aac6aad372f24298a4705fa3bff60bb2 3ef932af6f884db48dabfc82ba87b3d3 - - -] No compute service record found for host computenode01
2015-10-05 14:02:28.474 895 INFO nova.filters [req-c5339ab5-5f10-412f-9344-749d598b8286 aac6aad372f24298a4705fa3bff60bb2 3ef932af6f884db48dabfc82ba87b3d3 - - -] Filter RetryFilter returned 0 hosts
2015-10-05 14:03:33.316 895 INFO nova.scheduler.host_manager [req-1c916049-26b0-4add-8516-1c97173a9b05 - - - - -] The instance sync for host 'computenode02' did not match. Re-created its InstanceList.
2015-10-05 14:03:58.439 895 INFO nova.scheduler.host_manager [req-360ea999-d9a9-4869-b1b8-0452c016fb78 - - - - -] Successfully synced instances from host 'computenode01'.
2015-10-05 14:05:33.289 895 INFO nova.scheduler.host_manager [req-f3f749c7-30f7-4faf-b36c-0a31ce75694c - - - - -] Successfully synced instances from host 'computenode02'.
2015-10-05 14:05:58.809 895 INFO nova.scheduler.host_manager [req-928b7924-8c3c-4e53-a2d1-029070213a7a - - - - -] Successfully synced instances from host 'computenode01'.
2015-10-05 14:07:36.287 895 INFO nova.scheduler.host_manager [req-64e834ae-64a7-4eec-a2c8-d795d4d06b1b - - - - -] Successfully synced instances from host 'computenode02'.
2015-10-05 14:07:59.269 895 INFO nova.scheduler.host_manager [req-b566fb81-84e3-4c5c-8cb2-b61efd51d018 - - - - -] Successfully synced instances from host 'computenode01'.
2015-10-05 14:09:37.290 895 INFO nova.scheduler.host_manager [req-9c23b7d9-c5eb-4775-a2aa-b4fce76b62de - - - - -] Successfully synced instances from host 'computenode02'.
2015-10-05 14:09:59.645 895 INFO nova.scheduler.host_manager [req-fdc2b656-618a-4fc0-a887-c227ad876f57 - - - - -] Successfully synced instances from host 'computenode01'.
2015-10-05 14:11:40.284 895 INFO nova.scheduler.host_manager [req-420ebd35-5e1c-4428-9a4a-5654a9e90640 - - - - -] Successfully synced instances from host 'computenode02'.

This is the log from computenode:

2015-10-05 14:02:28.033 1006 TRACE nova.compute.manager [instance: 20f618b9-b1eb-450a-8088-8d540ca3169c]   File "/usr/lib/python2.7/site-packages/nova/virt/libvirt/vif.py", line 374, in get_config
2015-10-05 14:02:28.033 1006 TRACE nova.compute.manager [instance: 20f618b9-b1eb-450a-8088-8d540ca3169c]     _("Unexpected vif_type=%s") % vif_type)
2015-10-05 14:02:28.033 1006 TRACE nova.compute.manager [instance: 20f618b9-b1eb-450a-8088-8d540ca3169c] NovaException:
Unexpected vif_type=binding_failed
2015-10-05 14:02:28.033 1006 TRACE nova.compute.manager [instance: 20f618b9-b1eb-450a-8088-8d540ca3169c]
2015-10-05 14:02:28.035 1006 INFO nova.compute.manager [req-c5339ab5-5f10-412f-9344-749d598b8286 aac6aad372f24298a4705fa3bff60bb2 3ef932af6f884db48dabfc82ba87b3d3 - - -] [instance: 20f618b9-b1eb-450a-8088-8d540ca3169c] Terminating instance
2015-10-05 14:02:28.039 1006 INFO nova.virt.libvirt.driver [-] [instance: 20f618b9-b1eb-450a-8088-8d540ca3169c] During wait destroy, instance disappeared.
2015-10-05 14:02:28.054 1006 INFO nova.virt.libvirt.driver [req-c5339ab5-5f10-412f-9344-749d598b8286 aac6aad372f24298a4705fa3bff60bb2 3ef932af6f884db48dabfc82ba87b3d3 - - -] [instance: 20f618b9-b1eb-450a-8088-8d540ca3169c] Deleting instance files /var/lib/nova/instances/20f618b9-b1eb-450a-8088-8d540ca3169c_del
2015-10-05 14:02:28.056 1006 INFO nova.virt.libvirt.driver [req-c5339ab5-5f10-412f-9344-749d598b8286 aac6aad372f24298a4705fa3bff60bb2 3ef932af6f884db48dabfc82ba87b3d3 - - -] [instance: 20f618b9-b1eb-450a-8088-8d540ca3169c] Deletion of /var/lib/nova/instances/20f618b9-b1eb-450a-8088-8d540ca3169c_del complete
2015-10-05 14:02:28.266 1006 INFO nova.scheduler.client.report [req-c5339ab5-5f10-412f-9344-749d598b8286 aac6aad372f24298a4705fa3bff60bb2 3ef932af6f884db48dabfc82ba87b3d3 - - -] Compute_service record updated for ('computenode02', 'computenode02')
2015-10-05 14:03:16.515 1006 INFO nova.compute.resource_tracker [req-212f34c4-8ef7-48cf-92f4-8502925b9a27 - - - - -] Auditing locally available compute resources for node computenode02
2015-10-05 14:03:16.667 1006 INFO nova.compute.resource_tracker [req-212f34c4-8ef7-48cf-92f4-8502925b9a27 - - - - -] Total usable vcpus: 6, total allocated vcpus: 0
2015-10-05 14:03:16.667 1006 INFO nova.compute.resource_tracker [req-212f34c4-8ef7-48cf-92f4-8502925b9a27 - - - - -] Final resource view: name=computenode02 phys_ram=16763MB used_ram=1024MB phys_disk=49GB used_disk=1GB total_vcpus=6 used_vcpus=0 pci_stats=<nova.pci.stats.PciDeviceStats object at 0x5bc8510>

I am really stuck here and I am not sure what can cause this. Thanks for your help in advance!