Comment 17 for bug 1493188

Proposed branch is up for xenial handling overlayfs issues.

https://code.launchpad.net/~chad.smith/ubuntu/+source/cloud-utils/+git/cloud-utils/+ref/upload-xenial-handle-missing-overlayfs

 The review has been approved and a test ppa is setup with cloud-utils version 0.27-0ubuntu25.2 on Xenial which should resolve this issue.

If there is an opportunity to this this to confirm the fix, that would be great:

Verification procedure:
sudo add-apt-repository ppa:chad.smith/cloud-utils-uploads -y
sudo apt-get update
sudo apt-get install cloud-utils=0.27-0ubuntu25.2