New to Mercury...

Hi there. Two quick things to check:

1. Did you give it enough time? It takes only seconds to get the ubuntu image deployed and booted, but it takes just under 10 minutes for all the Mercury deployment magic to happen. If you filled in your email addy in the stackscript form, then it will email you when it's ready
2. Did you run install.php? I'm not sure if this is caused by Pressflow, or what, but hitting a brand new Mercury install doesn't automatically redirect you to install.php. So, instead of hitting http://1.1.1.1/ in your browser, hit http://1.1.1.1/install.php instead.

Give that a shot and let us know where you end up. If that doesn't get you going, there is a file /root/stackscript.log that should offer some pointers.

I am also new to Mercury and have been installing it to my own KVM-based server running on Ubuntu Jaunty 9.04 (amd64). I experienced the same persistent problem (Varnish 503 error) over the course of several attempted installs. In my case, I discovered through Webmin that apache was not starting correctly (even though it had been appearing to start from the command line when I ran /etc/init.d/apache2 start). Thanks to prior posts in this form, I was able to trace the error to APC (the logs reported that insufficient memory was being allocated to APC). I checked the apc.ini configuration (located in /etc/php5/apache2/conf.d) and found that following completion of the init.sh script (located in /etc/mercury/init.sh), the apc.ini file contained the following setting: apc.shm_size=4096. I doubled the RAM allocated to my KVM virtual machine (from 1024M to 2048M) and changed the above-referenced setting (in apc.ini) to apc.shm_size=1024. I was then able to start Apache from Webmin and no longer received the 503 error from Varnish.

Then, in attempting to install Mercury (from the standard Drupal web installation interface), I could not connect with the MySQL database I had created (the error reported there was no /var/run/mysqld/mysqld.sock file). Again, thanks to the information in this form, I learned someone else had fixed this problem by editing SELinux. Since Ubuntu runs AppArmor in lieu of SELinux, I followed the excellent advice located at http://www.howtoforge.org/perfect-server-ubuntu-9.10-ispconfig-3-p3 to disable and remove AppArmor completely (as set forth in that article, the three commands to enter (in order) are as follows: 1) /etc/init.d/apparmor stop 2) update-rc.d -f apparmor remove 3) aptitude remove apparmor apparmor-utils. Once AppArmor was gone, I was able to run /etc/init.d/mysql and install Mercury without further difficulty.

Frankly, I don't know if these steps are optimal (if someone has better solutions, please correct me). Nevertheless, I wanted to add my experiences as noted above in the hope I can help someone.