The current bug, as described is fixed.
Using today's server ISO, I was able to perform multiple installations,
to completion on virtio devices.
I'm marking this bug as "fix released".
That is not the end of the story, though. I have opened a new bug, Bug
#281492, as the grub installer seems to be buggy when installing to a
virtio disk. Hence, installed systems are not yet bootable. I'm
currently working this. Please post relevant comments to that bug.
:-Dustin
** Changed in: kvm (Ubuntu)
Status: Triaged => Fix Released
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Intrepid fails to install onto virtio block device
https://bugs.launchpad.net/bugs/279754
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