  We explore perturbations about a Friedmann-Robertson-Walker background in
Chern-Simons gravity. At large momenta one of the two circularly polarized
tensor modes becomes ghostlike. We argue that nevertheless the theory does not
exhibit classical runaway solutions, except possibly in the relativistic
nonlinear regime. However, the ghost modes cause the vacuum state to be quantum
mechanically unstable, with a decay rate that is naively infinite. The decay
rate can be made finite only if one interprets the theory as an effective
quantum field theory valid up to some momentum cutoff, which violates Lorentz
invariance. By demanding that the energy density in photons created by vacuum
decay over the lifetime of the Universe not violate observational bounds, we
derive strong constraints on the two dimensional parameter space of the theory,
consisting of the cutoff and the Chern-Simons mass.
