We're doing some test with contrail and up to now, everything working fine. ( 126.96.36.199-19 )
But when we try to insert a service instance, it keeps in spawning state for a couple of minutes and that the state becomes inactive. When we have a look in horizon, we're not seeing any service being started.
It looks like you are using service chain v1, when SDN controller launches service instance itself. I don't know why the instance does not launch successfully. But I think a more recommended way to do service chaining today is v2. In this case you launch service VM using method external to SDN controller (e.g. by yourself from Horizon) and then redirect traffic to its interfaces using Contrail service instance settings (port tuples, etc.)