Hummm... It seems I've found the culprit...
I'm using the "no cloud" plugin/data source for cloud-init, providing an cdrom ISO image with the relevant files.
The configs were not read at all during bootup, the reason being that the ISO image _needs_ to have a volume label for it to be mounted!
this is _not_ stated _explicitly_, even if the examples show this actually.
If this is the case it would be helpful to say that in the docs (i.e. "you should provide a volume label for the iso image otherwise cloud-init wouldn't be able to mount it during the boot process").
Anyway you shouldn't need a volume label to mount a cdrom!
Is it a bug ?!
Can I ask if are expected any special names for the volume label ?
Thanks.