diff --git a/control_plane/attachment_service/src/compute_hook.rs b/control_plane/attachment_service/src/compute_hook.rs
index 0d3610aafa..5bd1b6bf09 100644
--- a/control_plane/attachment_service/src/compute_hook.rs
+++ b/control_plane/attachment_service/src/compute_hook.rs
@@ -240,7 +240,7 @@ impl ComputeHook {
         let client = reqwest::Client::new();
         backoff::retry(
             || self.do_notify_iteration(&client, url, &reconfigure_request, cancel),
-            |e| matches!(e, NotifyError::Fatal(_)),
+            |e| matches!(e, NotifyError::Fatal(_) | NotifyError::Unexpected(_)),
             3,
             10,
             "Send compute notification",
diff --git a/control_plane/attachment_service/src/service.rs b/control_plane/attachment_service/src/service.rs
index febee1aa0d..1db1906df8 100644
--- a/control_plane/attachment_service/src/service.rs
+++ b/control_plane/attachment_service/src/service.rs
@@ -989,7 +989,15 @@ impl Service {
                 .collect();
         } else {
             // This was an update, wait for reconciliation
-            self.await_waiters(waiters).await?;
+            if let Err(e) = self.await_waiters(waiters).await {
+                // Do not treat a reconcile error as fatal: we have already applied any requested
+                // Intent changes, and the reconcile can fail for external reasons like unavailable
+                // compute notification API.  In these cases, it is important that we do not
+                // cause the cloud control plane to retry forever on this API.
+                tracing::warn!(
+                    "Failed to reconcile after /location_config: {e}, returning success anyway"
+                );
+            }
         }
 
         Ok(result)