Currently I am using Openstack Folsom, nova version 2013.1.4, Installed on Ubuntu 12.04. I upgraded my compute and network nodes's kernel to "Linux 3.2.0-58-generic". Since then, when I try to create an instance on a the compute nodes or when I restart the network node, the systems goes to Kernel panic.
The only fix for this issue I found, is to downgrade the kernel from "Linux 3.2.0-58-generic" to "Linux 3.2.0-55-generic" on all compute nodes and network node to keep things consistent. The controller nodes does not seem to be affected by this kernel bug.
Also make sure to install the header if the corresponding kernel, if you are installing the kernel. Or if you have already got "Linux 3.2.0-55-generic" kernel installed, then just change it to the default kernel in grub records.
First find out the index of the kernel in the grub records.
grep menuentry /boot/grub2/grub.cfg
Then the fist answer of the following question should help when editing the grub config.