diff --git a/api/src/com/cloud/host/Status.java b/api/src/com/cloud/host/Status.java
index 7b932e4762d..c915eb6a0cb 100644
--- a/api/src/com/cloud/host/Status.java
+++ b/api/src/com/cloud/host/Status.java
@@ -180,15 +180,18 @@ public enum Status {
         s_fsm.addTransition(Status.Disconnected, Event.WaitedTooLong, Status.Alert);
         s_fsm.addTransition(Status.Disconnected, Event.Remove, Status.Removed);
         s_fsm.addTransition(Status.Disconnected, Event.HypervisorVersionChanged, Status.Disconnected);
+        s_fsm.addTransition(Status.Disconnected, Event.AgentDisconnected, Status.Disconnected);
         s_fsm.addTransition(Status.Down, Event.MaintenanceRequested, Status.PrepareForMaintenance);
         s_fsm.addTransition(Status.Down, Event.AgentConnected, Status.Connecting);
         s_fsm.addTransition(Status.Down, Event.Remove, Status.Removed);
         s_fsm.addTransition(Status.Down, Event.ManagementServerDown, Status.Down);
+        s_fsm.addTransition(Status.Down, Event.AgentDisconnected, Status.Down);
         s_fsm.addTransition(Status.Alert, Event.MaintenanceRequested, Status.PrepareForMaintenance);
         s_fsm.addTransition(Status.Alert, Event.AgentConnected, Status.Connecting);
         s_fsm.addTransition(Status.Alert, Event.Ping, Status.Up);
         s_fsm.addTransition(Status.Alert, Event.Remove, Status.Removed);
         s_fsm.addTransition(Status.Alert, Event.ManagementServerDown, Status.Alert);
+        s_fsm.addTransition(Status.Alert, Event.AgentDisconnected, Status.Alert);
         s_fsm.addTransition(Status.Rebalancing, Event.RebalanceFailed, Status.Disconnected);
         s_fsm.addTransition(Status.Rebalancing, Event.RebalanceCompleted, Status.Connecting);
     }
diff --git a/server/src/com/cloud/agent/manager/AgentManagerImpl.java b/server/src/com/cloud/agent/manager/AgentManagerImpl.java
index a11d178920b..02d86f57443 100755
--- a/server/src/com/cloud/agent/manager/AgentManagerImpl.java
+++ b/server/src/com/cloud/agent/manager/AgentManagerImpl.java
@@ -1193,75 +1193,85 @@ public class AgentManagerImpl implements AgentManager, HandlerFactory, Manager {
 
     @SuppressWarnings("rawtypes")
     protected boolean loadDirectlyConnectedHost(HostVO host, boolean forRebalance) {
-        String resourceName = host.getResource();
+    	boolean initialized = false;
         ServerResource resource = null;
-        try {
-            Class<?> clazz = Class.forName(resourceName);
-            Constructor constructor = clazz.getConstructor();
-            resource = (ServerResource) constructor.newInstance();
-        } catch (ClassNotFoundException e) {
-            s_logger.warn("Unable to find class " + host.getResource(), e);
-            return false;
-        } catch (InstantiationException e) {
-            s_logger.warn("Unablet to instantiate class " + host.getResource(), e);
-            return false;
-        } catch (IllegalAccessException e) {
-            s_logger.warn("Illegal access " + host.getResource(), e);
-            return false;
-        } catch (SecurityException e) {
-            s_logger.warn("Security error on " + host.getResource(), e);
-            return false;
-        } catch (NoSuchMethodException e) {
-            s_logger.warn("NoSuchMethodException error on " + host.getResource(), e);
-            return false;
-        } catch (IllegalArgumentException e) {
-            s_logger.warn("IllegalArgumentException error on " + host.getResource(), e);
-            return false;
-        } catch (InvocationTargetException e) {
-            s_logger.warn("InvocationTargetException error on " + host.getResource(), e);
-            return false;
-        }
-
-        _hostDao.loadDetails(host);
-
-        HashMap<String, Object> params = new HashMap<String, Object>(host.getDetails().size() + 5);
-        params.putAll(host.getDetails());
-
-        params.put("guid", host.getGuid());
-        params.put("zone", Long.toString(host.getDataCenterId()));
-        if (host.getPodId() != null) {
-            params.put("pod", Long.toString(host.getPodId()));
-        }
-        if (host.getClusterId() != null) {
-            params.put("cluster", Long.toString(host.getClusterId()));
-            String guid = null;
-            ClusterVO cluster = _clusterDao.findById(host.getClusterId());
-            if (cluster.getGuid() == null) {
-                guid = host.getDetail("pool");
-            } else {
-                guid = cluster.getGuid();
-            }
-            if (guid != null && !guid.isEmpty()) {
-                params.put("pool", guid);
-            }
-        }
-
-        params.put("ipaddress", host.getPrivateIpAddress());
-        params.put("secondary.storage.vm", "false");
-        params.put("max.template.iso.size", _configDao.getValue("max.template.iso.size"));
-
-        try {
-            resource.configure(host.getName(), params);
-        } catch (ConfigurationException e) {
-            e.printStackTrace();
-            s_logger.warn("Unable to configure resource due to ", e);
-            return false;
-        }
-
-        if (!resource.start()) {
-            s_logger.warn("Unable to start the resource");
-            return false;
-        }
+    	try {
+	        String resourceName = host.getResource();
+	        try {
+	            Class<?> clazz = Class.forName(resourceName);
+	            Constructor constructor = clazz.getConstructor();
+	            resource = (ServerResource) constructor.newInstance();
+	        } catch (ClassNotFoundException e) {
+	            s_logger.warn("Unable to find class " + host.getResource(), e);
+	            return false;
+	        } catch (InstantiationException e) {
+	            s_logger.warn("Unablet to instantiate class " + host.getResource(), e);
+	            return false;
+	        } catch (IllegalAccessException e) {
+	            s_logger.warn("Illegal access " + host.getResource(), e);
+	            return false;
+	        } catch (SecurityException e) {
+	            s_logger.warn("Security error on " + host.getResource(), e);
+	            return false;
+	        } catch (NoSuchMethodException e) {
+	            s_logger.warn("NoSuchMethodException error on " + host.getResource(), e);
+	            return false;
+	        } catch (IllegalArgumentException e) {
+	            s_logger.warn("IllegalArgumentException error on " + host.getResource(), e);
+	            return false;
+	        } catch (InvocationTargetException e) {
+	            s_logger.warn("InvocationTargetException error on " + host.getResource(), e);
+	            return false;
+	        }
+	
+	        _hostDao.loadDetails(host);
+	
+	        HashMap<String, Object> params = new HashMap<String, Object>(host.getDetails().size() + 5);
+	        params.putAll(host.getDetails());
+	
+	        params.put("guid", host.getGuid());
+	        params.put("zone", Long.toString(host.getDataCenterId()));
+	        if (host.getPodId() != null) {
+	            params.put("pod", Long.toString(host.getPodId()));
+	        }
+	        if (host.getClusterId() != null) {
+	            params.put("cluster", Long.toString(host.getClusterId()));
+	            String guid = null;
+	            ClusterVO cluster = _clusterDao.findById(host.getClusterId());
+	            if (cluster.getGuid() == null) {
+	                guid = host.getDetail("pool");
+	            } else {
+	                guid = cluster.getGuid();
+	            }
+	            if (guid != null && !guid.isEmpty()) {
+	                params.put("pool", guid);
+	            }
+	        }
+	
+	        params.put("ipaddress", host.getPrivateIpAddress());
+	        params.put("secondary.storage.vm", "false");
+	        params.put("max.template.iso.size", _configDao.getValue("max.template.iso.size"));
+	
+	        try {
+	            resource.configure(host.getName(), params);
+	        } catch (ConfigurationException e) {
+	            s_logger.warn("Unable to configure resource due to ", e);
+	            return false;
+	        }
+	
+	        if (!resource.start()) {
+	            s_logger.warn("Unable to start the resource");
+	            return false;
+	        }
+        
+	        initialized = true;
+    	} finally {
+    		if(!initialized) {
+                if (host != null) {
+                    _hostDao.updateStatus(host, Event.AgentDisconnected, _nodeId);
+                }
+    		}	
+    	}
 
         if (forRebalance) {
             AgentAttache attache = simulateStart(host.getId(), resource, host.getDetails(), false, null, null, true);