Typically this problem is due to how the .profile and .bashrc or .cshrc
files are setup. When you login to the host, a different startup file is
executed compare with when you just execute a remote command using ssh.
Try the following:
ssh nodehost java -version
I expect that you'll get an error message that says java isn't found.
Trying setting the PATH in your startup file, e.g., .bashrc, and then
try this again. Once you can execute java using the command above, then
you'll be able to create and start instances too.
Tom