I am facing same issue in my lab setup on my laptop.

Environment:

Istio version installed 1.7. Pods are up and working

vagrant@master-1:~$ kubectl get pods -n istio-system

NAME READY STATUS RESTARTS AGE
grafana-75b5cddb4d-5t5lq 1/1 Running 1 16h
istio-egressgateway-695f5944d8-s7mbg 1/1 Running 1 16h
istio-ingressgateway-5c697d4cd7-vpd68 1/1 Running 1 16h
istiod-76fdcdd945-tscgc 1/1 Running 0 17m
kiali-6c49c7d566-8wbnw 1/1 Running 1 16h
prometheus-9d5676d95-zxbnk 2/2 Running 2 14h

Kubernetes Cluster information:-

Cluster is deployed by hard way 1 LB in front of master with IP 192.168.5.30 and HA proxy running , 1 Master node 192.168.5.11, 2 worker nodes in setup deployed on VMbox Ubuntu VMs . I am using weavenet as the CNI for my cluster.

Worker Node in cluster:-

vagrant@loadbalancer:~$ kubectl get node -o wide

NAME       STATUS   ROLES    AGE   VERSION   INTERNAL-IP    EXTERNAL-IP   OS-IMAGE             KERNEL-VERSION       CONTAINER-RUNTIME
worker-3   Ready    <none>   62d   v1.18.0   192.168.5.24   <none>        Ubuntu 18.04.4 LTS   4.15.0-112-generic   docker://19.3.12
worker-4   Ready    <none>   61d   v1.18.0   192.168.5.25   <none>        Ubuntu 18.04.4 LTS   4.15.0-112-generic   docker://19.3.12
vagrant@loadbalancer:~$

Kube-Apisever config

 --ExecStart=/usr/local/bin/kube-apiserver \\
 --advertise-address=192.168.5.11 \\
 --allow-privileged=true \\
 --apiserver-count=3 \\
 --audit-log-maxage=30 \\
 --audit-log-maxbackup=3 \\
 --audit-log-maxsize=100 \\
 --audit-log-path=/var/log/audit.log \\
 --authorization-mode=Node,RBAC \\
 --bind-address=0.0.0.0 \\
 --client-ca-file=/var/lib/kubernetes/ca.crt \\
 --enable-admission-plugins=NodeRestriction,ServiceAccount \\
 --enable-swagger-ui=true \\
 --enable-bootstrap-token-auth=true \\
 --etcd-cafile=/var/lib/kubernetes/ca.crt \\
 --etcd-certfile=/var/lib/kubernetes/etcd-server.crt \\
 --etcd-keyfile=/var/lib/kubernetes/etcd-server.key \\
 --etcd-servers=https://192.168.5.11:2379 \\
 --event-ttl=1h \\
 --encryption-provider-config=/var/lib/kubernetes/encryption-config.yaml \\
 --kubelet-certificate-authority=/var/lib/kubernetes/ca.crt \\
 --kubelet-client-certificate=/var/lib/kubernetes/kube-apiserver.crt \\
 --kubelet-client-key=/var/lib/kubernetes/kube-apiserver.key \\
 --kubelet-https=true \\
 --service-account-key-file=/var/lib/kubernetes/service-account.crt \\
 --service-cluster-ip-range=10.96.0.0/24 \\
 --service-node-port-range=30000-32767 \\
 --tls-cert-file=/var/lib/kubernetes/kube-apiserver.crt \\
 --tls-private-key-file=/var/lib/kubernetes/kube-apiserver.key \\
 --v=2

istio pod svc

vagrant@master-1:~$ kubectl describe svc istiod -n istio-system
Name:              istiod
Namespace:         istio-system
Labels:            app=istiod
                   install.operator.istio.io/owning-resource=installed-state
                   install.operator.istio.io/owning-resource-namespace=istio-system
                   istio=pilot
                   istio.io/rev=default
                   operator.istio.io/component=Pilot
                   operator.istio.io/managed=Reconcile
                   operator.istio.io/version=1.7.0
                   release=istio
Annotations:       Selector:  app=istiod,istio=pilot
Type:              ClusterIP
IP:                10.96.0.197
Port:              grpc-xds  15010/TCP
TargetPort:        15010/TCP
Endpoints:         10.44.0.7:15010
Port:              https-dns  15012/TCP
TargetPort:        15012/TCP
Endpoints:         10.44.0.7:15012
Port:              https-webhook  443/TCP
TargetPort:        15017/TCP
Endpoints:         10.44.0.7:15017
Port:              http-monitoring  15014/TCP
TargetPort:        15014/TCP
Endpoints:         10.44.0.7:15014
Port:              dns-tls  853/TCP
TargetPort:        15053/TCP
Endpoints:         10.44.0.7:15053
Session Affinity:  None
Events:            <none>

basic troubleshooting

vagrant@loadbalancer:~$ kubectl -n istio-system get configmap istio-sidecar-injector -o jsonpath='{.data.config}' | grep policy:
policy: enabled


vagrant@loadbalancer:~$ kubectl get mutatingwebhookconfiguration istio-sidecar-injector -o yaml | grep 

  

>   istio-injection: enabled  
   bjectSelector: {}  
   reinvocationPolicy:
>  Never

Error from Kube API server

Aug 31 02:48:22 master-1 kube-apiserver[1750]: I0831 02:48:22.521377 1750 trace.go:116] Trace[51800791]: “Call mutating webhook” configuration:istio-sidecar-injector,webhook:sidecar-injector.istio.io,resource:/v1, Resource=pods,subresource:,operation:CREATE,UID:9b96e1b2-3bbe-41d6-a727-0e19cdd9fbd1 (started: 2020-08-31 02:47:52.521061627 +0000 UTC m=+1080.518695497) (total time:30.000277923s):
Aug 31 02:48:22 master-1 kube-apiserver[1750]: Trace[51800791]: [30.000277923s] [30.000277923s] END
Aug 31 02:48:22 master-1 kube-apiserver[1750]: W0831 02:48:22.521529 1750 dispatcher.go:181] Failed calling webhook, failing closed sidecar-injector.istio.io: failed calling webhook “sidecar-injector.istio.io”: Post https://istiod.istio-system.svc:443/inject?timeout=30s: net/http: request canceled while waiting for connection (Client.Timeout exceeded while awaiting headers)
Aug 31 02:48:22 master-1 kube-apiserver[1750]: I0831 02:48:22.521814 1750 trace.go:116] Trace[491776795]: “Create” url:/api/v1/namespaces/dev/pods,user-agent##  ##:kubectl/v1.18.0 (linux/amd64) kubernetes/9e99141,client:192.168.5.30 (started: 2020-08-31 02:47:52.510910326 +0000 UTC m=+1080.508544152) (total time: 30.010883231s):
Aug 31 02:48:22 master-1 kube-apiserver[1750]: Trace[491776795]: [30.010883231s] [30.003030474s] END