First off, I didn't have issue with the admin user. I also didn't have any issues with the Foreman UI creating image based VM's as an LDAP user. My problems are only with the REST API.

When I login as an LDAP user, the following REST call fails with

REST Call: https://katello/api/operatingsystems/23/images
Error : "undefined method `user_data_supported?' for nil:NilClass"

But, if I go in a different way, no problems

REST Call: https://katello/api/compute_resources/5/images
Success