For reference. Not the ideal solution but it worked for me. Since this is kind of related to Ambari I reverted back to 1.6.1, step:
1. Stopped and removed ambari server and all agents
2. Deleted repo and any directories for ambari
3. Downloaded and installed ambari 1.6.1
4. Re-configured/installed cluster, as HDP version remained the same
5. Formatted namenode and hbase
6. Change the config: yarn.timeline-service.store-class = org.apache.hadoop.yarn.server.applicationhistoryservice.timeline.LeveldbTimelineStore
7. Start ATS, failed, checked logs for historyserver, error: Permission denied on /hadoop/yarn/timeline/leveldb.timeline-store.ldb/LOCK
8. Deleted the leveldb-timeline-store.ldb
9. Restarted ATS, worked fine!
Usually I never got this issue for other cluster installs using HDP2.2 and Ambari 1.7.0.