Yours may be a different problem than what I just went though but sounds very similar and it only started happening after I installed Docker on my LXD Host.
In my case 2 days ago I installed Docker on my LXD Host.
Yesterday I created an LXD VM using Ubuntu 22.04 image (lxc launch ubuntu:22.04 vm1 --vm)
VM1 would be created and start ok but I had strange problems with it.
I did a quick search and found this 7 month old Thread which lead me to the root of the problem in my case (which was the fact that I had installed Docker on my LXD Host):
In particular this comment in that “thread” pointed to Docker:
If you have both Docker and LXD installed see if this helps.
Read the “Note on #4” at the bottom.