Comment 2 for bug 1020327

John, if you can reproduce instances being created without the default security group, please provide instructions

The relevant code in nova/compute/api.py is:

 # Use 'default' security_group if none specified.
        if security_groups is None:
            security_groups = ['default']
        elif not isinstance(security_groups, list):
            security_groups = [security_groups]
        instance['security_groups'] = security_groups

and in _create_instance:

        if not security_group:
            security_group = 'default'