cloud-init not working when guest is started via REST API

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Issue

cloud-init seems to no longer work properly in RHEL 6 and RHEL 7 guests created and started via REST API after an upgrade of RHEV-M from 3.5.3.1-1.4 to 3.5.5-0.1.
cloud-init seems to no longer work properly in RHEL 6 and RHEL 7 guests created and started via REST API after upgrading to RHEV-M 3.6.4

Environment

Red Hat Enterprise Virtualization 3.5.5
Red Hat Enterprise Virtualization 3.6.0

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