Openstack Compute with Xen in Ubuntu 11.10 fails to load due to Domain-0 being considered an instance

I've installed nova-compute along with xen and libvirt in a fresh Ubuntu 11.10 install. But I'm experiencing some problems to get it running.

nova-compute service fails to start and nova-compute.log shows this error message:

2011-12-26 09:36:03,679 CRITICAL nova [-] [Errno 2] No such file or directory: '/var/lib/nova/instances/Domain-0/console.ring'
(nova): TRACE: Traceback (most recent call last):
(nova): TRACE: File "/usr/bin/nova-compute", line 49, in <module>
(nova): TRACE: service.wait()
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/service.py", line 357, in wait
(nova): TRACE: _launcher.wait()
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/service.py", line 107, in wait
(nova): TRACE: service.wait()
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/eventlet/greenthread.py", line 166, in wait
(nova): TRACE: return self._exit_event.wait()
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/eventlet/event.py", line 116, in wait
(nova): TRACE: return hubs.get_hub().switch()
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/eventlet/hubs/hub.py", line 177, in switch
(nova): TRACE: return self.greenlet.switch()
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/eventlet/greenthread.py", line 192, in main
(nova): TRACE: result = function(*args, **kwargs)
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/service.py", line 77, in run_server
(nova): TRACE: server.start()
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/service.py", line 137, in start
(nova): TRACE: self.manager.init_host()
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/compute/manager.py", line 157, in init_host
(nova): TRACE: self.driver.init_host(host=self.host)
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/connection.py", line 253, in init_host
(nova): TRACE: self._start_console_logger(name, fifo_path, ringbuffer_path)
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/connection.py", line 297, in _start_console_logger
(nova): TRACE: self.console_loggers[name] = ConsoleLogger(fifo_path, ringbuffer_path)
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/virt/libvirt/connection.py", line 186, in __init__
(nova): TRACE: FLAGS.libvirt_console_log_size)
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/utils.py", line 932, in __init__
(nova): TRACE: self.f = self._open(backing_file)
(nova): TRACE: File "/usr/lib/python2.7/dist-packages/nova/utils.py", line 970, in _open
(nova): TRACE: fd = os.open(filename, os.O_RDWR | os.O_CREAT, 0666)
(nova): TRACE: OSError: [Errno 2] No such file or directory: '/var/lib/nova/instances/Domain-0/console.ring'

Is there anything else I need to do to make Diablo work with Xen? It seems that openstack is considering Domain-0 an instance, what shouldn't be happening. I used to have a similar configuration in Ubuntu 10.04 and it worked fine.