diff --git a/sdk_container/src/third_party/coreos-overlay/app-emulation/google-compute-engine/google-compute-engine-20160930.ebuild b/sdk_container/src/third_party/coreos-overlay/app-emulation/google-compute-engine/google-compute-engine-20160930-r1.ebuild
similarity index 74%
rename from sdk_container/src/third_party/coreos-overlay/app-emulation/google-compute-engine/google-compute-engine-20160930.ebuild
rename to sdk_container/src/third_party/coreos-overlay/app-emulation/google-compute-engine/google-compute-engine-20160930-r1.ebuild
index 781470b0cb..179bf9adbf 100644
--- a/sdk_container/src/third_party/coreos-overlay/app-emulation/google-compute-engine/google-compute-engine-20160930.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/app-emulation/google-compute-engine/google-compute-engine-20160930-r1.ebuild
@@ -16,7 +16,7 @@ IUSE=""
 
 DEPEND="dev-python/setuptools"
 
-# These dependencies cover everything possibly called by the scripts.
+# These dependencies cover all commands called by the scripts.
 RDEPEND="
 	app-admin/sudo
 	dev-python/boto
@@ -26,18 +26,10 @@ RDEPEND="
 	sys-apps/grep
 	sys-apps/iproute2
 	sys-apps/shadow
-	sys-libs/glibc
-	sys-libs/nss-usrfiles
 "
 
 S="${WORKDIR}/compute-image-packages-${PV}"
 
-src_prepare() {
-	# Don't attempt to mess with our host keys.
-	sed -i -e '/set_host_keys/s/true/false/i' \
-		"${S}"/google_compute_engine/instance_setup/instance_config.py
-}
-
 src_compile() {
 	(cd "${S}" && exec python setup.py build)
 }
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/coreos-oem-gce-0.0.1-r1.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/coreos-oem-gce-0.0.1-r1.ebuild
new file mode 120000
index 0000000000..348c68c571
--- /dev/null
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/coreos-oem-gce-0.0.1-r1.ebuild
@@ -0,0 +1 @@
+coreos-oem-gce-0.0.1.ebuild
\ No newline at end of file
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/coreos-oem-gce-0.0.1.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/coreos-oem-gce-0.0.1.ebuild
index f078935872..d42d1befb7 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/coreos-oem-gce-0.0.1.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/coreos-oem-gce-0.0.1.ebuild
@@ -13,4 +13,6 @@ IUSE=""
 
 RDEPEND="
 	app-emulation/google-compute-engine
+	sys-libs/glibc
+	sys-libs/nss-usrfiles
 "
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/files/manglefs.sh b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/files/manglefs.sh
index cee4b02818..013b990370 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/files/manglefs.sh
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-base/coreos-oem-gce/files/manglefs.sh
@@ -7,6 +7,11 @@ set -e
 cat << 'EOF' > init.sh && chmod 755 init.sh
 #!/bin/bash -ex
 
+# Write a configuration template if it does not exist.
+[ -e /etc/default/instance_configs.cfg.template ] ||
+echo -e > /etc/default/instance_configs.cfg.template \
+    '[InstanceSetup]\nset_host_keys = false'
+
 # Run the initialization scripts.
 /usr/bin/google_instance_setup
 /usr/bin/google_network_setup
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-devel/board-packages/board-packages-0.0.1-r7.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-devel/board-packages/board-packages-0.0.1-r8.ebuild
similarity index 100%
rename from sdk_container/src/third_party/coreos-overlay/coreos-devel/board-packages/board-packages-0.0.1-r7.ebuild
rename to sdk_container/src/third_party/coreos-overlay/coreos-devel/board-packages/board-packages-0.0.1-r8.ebuild
diff --git a/sdk_container/src/third_party/coreos-overlay/coreos-devel/board-packages/board-packages-0.0.1.ebuild b/sdk_container/src/third_party/coreos-overlay/coreos-devel/board-packages/board-packages-0.0.1.ebuild
index 441c891069..87d2d5ab48 100644
--- a/sdk_container/src/third_party/coreos-overlay/coreos-devel/board-packages/board-packages-0.0.1.ebuild
+++ b/sdk_container/src/third_party/coreos-overlay/coreos-devel/board-packages/board-packages-0.0.1.ebuild
@@ -16,9 +16,9 @@ IUSE=""
 DEPEND=""
 RDEPEND="
 	amd64? (
-		app-emulation/google-compute-engine
 		app-emulation/open-vm-tools
 		app-emulation/wa-linux-agent
+		coreos-base/coreos-oem-gce
 		coreos-base/nova-agent-container
 		coreos-base/nova-agent-watcher
 		dev-lang/python-oem
diff --git a/sdk_container/src/third_party/coreos-overlay/profiles/coreos/targets/generic/oem-aci/package.mask b/sdk_container/src/third_party/coreos-overlay/profiles/coreos/targets/generic/oem-aci/package.mask
deleted file mode 100644
index 8e2929318b..0000000000
--- a/sdk_container/src/third_party/coreos-overlay/profiles/coreos/targets/generic/oem-aci/package.mask
+++ /dev/null
@@ -1,6 +0,0 @@
-# Packages that we do not want to ship in OEM ACI images. Masking these is
-# merely as a safe guard against pulling them in accidentally.
-
-# OEM ACIs have no reason to include boot-related packages.
-sys-boot/*
-sys-kernel/*