etch:/mnt# ec2-upload-bundle -b khaz_debian_elasticdrive041_02 -m /mnt/image.manifest.xml -a key -s secretkey
Setting bucket ACL to allow EC2 read access ...
Error: could not create or access bucket khaz_debian_elasticdrive041_02: server response 400 (Bad Request)
trying --debug option showed, that create bucket operation fails.
Searching Amazon EC2 forums didn't give anything valuable, so I'd tried to create bucket manually and voila - it spits error that sound like "You've tried to create more buckets than allowed". So deleting some garbage buckets helped to get rid of this hard to trace error (at least for me).