Comment 3 for bug 1628301

+1 Tony's comment here, Nova is getting a binding failure from Neutron here. Neutron logs should say why that is happening, with a bit of luck.

That port create cmd looks wrong:
neutron port-create INSIDE_NET --name sriov_port1 --binding:vnic_type direct --device_owner nova-compute

Why are you setting a device_owner on that? I though you are not meant to set that as a user. Its possible that is contributing towards the binding issues, but I am not sure. Its certainly not set in these examples:
http://docs.openstack.org/mitaka/networking-guide/config-sriov.html
It might make no different, but I think its worth ruling that out.

It doesn't look like you have set the firewall_driver in the nova.conf to be the NoOpFirewall driver, unsure if that is required.

The whitelist seems very large:
pci_passthrough_whitelist = { "address":"*:88:*", "physical_network": "physnet1" }
We have made changes to what happens if a physical function is in that list, but I don't remember the details, its worth double checking that is correct.