Instance fails to start due to "insufficient capacity" error

This error doesn't mean you might have too many resources running. It means AWS doesn't have enough capacity for that particular instance type in that particular availability zone. So as long as they don't have enough capacity for it in that availability zone, you won't be able to start it. You can ask AWS but I am guessing it's not that straightforward to add more capacity and those kind of things can take time. Since you have already tried starting it multiple times at different intervals, here's what I can suggest as a workaround.

1. Change your instance type and try to start it again. Like I said, that instance type isn't available so you may have better luck changing the instance type and then try to start it again. Hopefully, the other instance type will have enough capacity. You can find a different instance type which has enough resources to support your workload. Take a look at the list: https://aws.amazon.com/ec2/instance-types/
2. If you absolutely need to use the same instance type, then one workaround would be to create an AMI from your instance. And then re-launch the instance from your AMI in a different availability zone. There is no guarantee it would be work. But you can try your luck in a different availability zone.

NOTE: Before you do any of those, make sure to create a backup of your volume or an AMI of your instance to be on the safe side!

Thanks tahatahir. I'll try changing the instance type. I see m1 isn't even listed as an instance type anymore, so maybe that could be my issue. Almost like an out-of-support thing. Ken

What region and availability zone? N. Virginia, and US East 1C.

What instance type are you trying to use? m1.small. It is a community AMI, as I needed an older Linux version with older system libraries (specifically, an older glibc version), and Amazon's AMIs are too "new".

Ken