Turns out the user adding should be done when the chroot is available...

live-build/ubuntu-cpc/hooks/042-vagrant.binary

@@ -67,6 +67,29 @@ chroot ${mount_d} apt-get update
 # avoid pulling into a cloud image.
 chroot ${mount_d} apt-get install --no-install-recommends -y virtualbox-guest-utils
 chroot ${mount_d} apt-get clean
+
+# Create and setup users inside the image.
+# Vagrant users expect a "vagrant" user with a "vagrant" username, and that the
+# root password is set to "vagrant" as well.
+# See https://www.vagrantup.com/docs/boxes/base.html
+chroot ${mount_d} useradd -m vagrant -s /bin/bash
+echo "root:vagrant" | chroot ${mount_d} chpasswd
+echo "vagrant:vagrant" | chroot ${mount_d} chpasswd
+
+# The vagrant user should have passwordless sudo.
+cat << EOF > ${mount_d}/etc/sudoers.d/vagrant
+vagrant ALL=(ALL) NOPASSWD:ALL
+EOF
+
+# Add the insecure vagrant pubkey to the vagrant user, as is expected by the
+# vagrant ecosystem (https://www.vagrantup.com/docs/boxes/base.html)
+chroot ${mout_d} chmod 0440 /etc/sudoers.d/vagrant
+chroot ${mount_d} mkdir -p /home/vagrant/.ssh
+chroot ${mount_d} chown -R vagrant: /home/vagrant/.ssh
+cat << EOF > ${mount_d}/home/vagrant/.ssh/authorized_keys
+ssh-rsa AAAAB3NzaC1yc2EAAAABIwAAAQEA6NF8iallvQVp22WDkTkyrtvp9eWW6A8YVr+kz4TjGYe7gHzIw+niNltGEFHzD8+v1I2YJ6oXevct1YeS0o9HZyN1Q9qgCgzUFtdOKLv6IedplqoPkcmF0aYet2PkEDo3MlTBckFXPITAMzF8dJSIFo9D8HfdOV0IAdx4O7PtixWKn5y2hMNG0zQPyUecp4pzC6kivAIhyfHilFR61RGL+GPXQ2MWZWFYbAGjyiYJnAmCP3NOTd0jMZEnDkbUvxhMmBYSdETk1rRgm+R4LOzFUGaHqHDLKLX+FIPKcF96hrucXzcWyLbIbEgE98OHlnVYCzRdK8jlqm8tehUc9c9WhQ== vagrant insecure public key
+EOF
+
 umount_disk_image "$mount_d"
 rmdir "$mount_d"
 
@@ -94,28 +117,6 @@ ubuntu_user_pass=$(openssl rand -hex 12)
 cdrom_vmdk_f="${box_d}/${prefix}-configdrive.vmdk"
 
 
-# Create and setup users inside the image.
-# Vagrant users expect a "vagrant" user with a "vagrant" username, and that the
-# root password is set to "vagrant" as well.
-# See https://www.vagrantup.com/docs/boxes/base.html
-chroot ${mount_d} useradd -m vagrant -s /bin/bash
-echo "root:vagrant" | chroot ${mount_d} chpasswd
-echo "vagrant:vagrant" | chroot ${mount_d} chpasswd
-
-# The vagrant user should have passwordless sudo.
-cat << EOF > ${mount_d}/etc/sudoers.d/vagrant
-vagrant ALL=(ALL) NOPASSWD:ALL
-EOF
-
-# Add the insecure vagrant pubkey to the vagrant user, as is expected by the
-# vagrant ecosystem (https://www.vagrantup.com/docs/boxes/base.html)
-chroot ${mout_d} chmod 0440 /etc/sudoers.d/vagrant
-chroot ${mount_d} mkdir -p /home/vagrant/.ssh
-chroot ${mount_d} chown -R vagrant: /home/vagrant/.ssh
-cat << EOF > ${mount_d}/home/vagrant/.ssh/authorized_keys
-ssh-rsa AAAAB3NzaC1yc2EAAAABIwAAAQEA6NF8iallvQVp22WDkTkyrtvp9eWW6A8YVr+kz4TjGYe7gHzIw+niNltGEFHzD8+v1I2YJ6oXevct1YeS0o9HZyN1Q9qgCgzUFtdOKLv6IedplqoPkcmF0aYet2PkEDo3MlTBckFXPITAMzF8dJSIFo9D8HfdOV0IAdx4O7PtixWKn5y2hMNG0zQPyUecp4pzC6kivAIhyfHilFR61RGL+GPXQ2MWZWFYbAGjyiYJnAmCP3NOTd0jMZEnDkbUvxhMmBYSdETk1rRgm+R4LOzFUGaHqHDLKLX+FIPKcF96hrucXzcWyLbIbEgE98OHlnVYCzRdK8jlqm8tehUc9c9WhQ== vagrant insecure public key
-EOF
-
 # Create the user-data. This is totally insecure, but so is Vagrant. To
 # mitigate this insecurity, the vagrant instance is not accessible
 # except via local host.