You haven't provided a lot of detail about exactly how you "create an image out of the snapshot" but based on what I see, I'm going to guess that you may not have specified the correct AKI or ARI.
If you create an image out of a snapshot of an EBS root volume, you need to specify the AKI (kernel) to use with the new AMI. Just use the same one that was used by the original AMI. If the original AMI used an ARI (ramdisk) specify that, too.
Instead of doing the snapshot and AMI registration in separate steps, you can do it all at once with the
ec2-create-image command/API. This functionality is also available in the EC2 console as the menu item "Create Image (EBS AMI)" when you right click on the instance listing. Note that this will stop the instance temporarily to make sure the snapshot is consistent.
Here's a log of a session where I ran the Ubuntu AMI you describe above, performed an
ec2-create-snapshot on the instance to create a new AMI, and ran an instance of the new AMI. I was able to ssh in just fine to the new instance of the new AMI.
$ ec2-run-instances --key $USER --instance-type t1.micro ami-fd589594
RESERVATION r-12ea647c XXX default
INSTANCE i-50b5a230 ami-fd589594 pending XXX 0 t1.micro 2011-10-19T07:26:37+0000 us-east-1d aki-427d952b monitoring-disabled ebs paravirtual xen sg-XXX default
$ ec2-create-image -n "test AMI $(date +%Y%m%d-%H%M)" i-50b5a230
$ ec2-run-instances --key $USER --instance-type t1.micro ami-4bbc7322
RESERVATION r-66e66808 XXX default
INSTANCE i-f2b1a692 ami-4bbc7322 pending XXX 0 t1.micro 2011-10-19T07:32:37+0000 us-east-1a aki-427d952b monitoring-disabled ebs paravirtual xen sg-XXX default
$ ssh firstname.lastname@example.org
Note: In order to avoid having to specify
-i KEYPAIR.pem in the ssh command I uploaded my personal ssh key to EC2 following the instructions I've written about here:
Uploading Personal ssh Keys to Amazon EC2