VMSS restart hangs indefinitely at creating .ssh directory

[klchung]

Expected behavior

Restart completed successfully as per serial console log below:
...
passwd: password for docker changed by root

• /home/docker/.ssh: creating directory
• Pulling Azure lookup tool ...18.09.2-ce-azure1: Pulling from docker4x/lookup-azure

Actual behavior

Restart hangs indefinitely at:
passwd: password for docker changed by root

• /home/docker/.ssh: creating directory

Information

Same issue encountered previously logged here but with no solution provided
#48

• Full output of the diagnostics from "docker-diagnose" ran from one of the instance
• A reproducible case if this is a bug, Dockerfiles FTW
• Page URL if this is a docs issue or the name of a man page

Steps to reproduce the behavior

1. Deploy custom template https://portal.azure.com/#create/Microsoft.Template/uri/https%3A%2F%2Fdownload.docker.com%2Fazure%2Fstable%2FDocker.tmpl

2. Stop and Start VMSS for manager or worker node