In the meantime, to have a workaround at least for development purposes, here's a twoliner one can run before instack-virt-setup and before building overcloud images:
https://paste.fedoraproject.org/453957/14767178/raw/
Discussed it with Haikel, RDO builds from upstream releases rather than using DLRN promote at this point, we agreed to make an RDO packaging backport, i posted the patch here: https://review.rdoproject.org/r/#/c/3360/
The issue not reproduced with diskimage-builder-1.21.0-4.el7ost.noarch,
instack-virt-setup command executed successfully, please refer attachment 1216932[details] for details.
Since the problem described in this bug report should be
resolved in a recent advisory, it has been closed with a
resolution of ERRATA.
For information on the advisory, and where to find the updated
files, follow the link below.
If the solution does not work for you, open a new bug report.
https://rhn.redhat.com/errata/RHEA-2016-2948.html
Description of problem: instack-virt-setup fails with + install_grub2 + '[' -f /tmp/grub/install ']' + source /tmp/grub/install ++ rpm -i /tmp/grub/grub2-2.02-0.41.el7.x86_64.rpm warning: /tmp/grub/grub2-2.02-0.41.el7.x86_64.rpm: Header V3 RSA/SHA256 Signature, key ID f21541eb: NOKEY error: Failed dependencies: grub2-tools = 1:2.02-0.41.el7 is needed by grub2-1:2.02-0.41.el7.x86_64 # rpm -q diskimage-builder diskimage-builder-1.18.2-0.20160802165621.e884309.el7ost.noarch