@joseph, I found out the coulprit after getting to the same possition with a 
CentOS system and trying couple kernels.
The issue is being caused by a docker package from the "official" repository.
The issue was resolved with the 4.6 kernel since it didn't had the aufs module 
and there for the docker could not start and do harm.
Once I disable the docker service and reboot the system is back up and running.
But the issue accured with both 4.4.0-x 4.6.x 4.8.0-x when I managed to make 
the docker start up.
It happen only after upgrading the system so I cannot find the exact version of 
docker it started.

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https://bugs.launchpad.net/bugs/1674629

Title:
  virtio guest nics doesn't have network connectivity

Status in linux package in Ubuntu:
  Confirmed
Status in linux source package in Xenial:
  Confirmed

Bug description:
  Before the update to this version of the kernel the VM's could recieve DHCP 
and contact the network.
  Once I updated the server to 4.4.0-66 my guest VM's cannot communicate with 
the network.

  ProblemType: Bug
  DistroRelease: Ubuntu 16.04
  Package: linux-image-4.4.0-66-generic 4.4.0-66.87
  ProcVersionSignature: Ubuntu 4.4.0-66.87-generic 4.4.44
  Uname: Linux 4.4.0-66-generic x86_64
  AlsaDevices:
   total 0
   crw-rw----+ 1 root audio 116,  1 Mar 21 11:36 seq
   crw-rw----+ 1 root audio 116, 33 Mar 21 11:36 timer
  AplayDevices: Error: [Errno 2] No such file or directory: 'aplay'
  ApportVersion: 2.20.1-0ubuntu2.5
  Architecture: amd64
  ArecordDevices: Error: [Errno 2] No such file or directory: 'arecord'
  AudioDevicesInUse: Error: command ['fuser', '-v', '/dev/snd/seq', 
'/dev/snd/timer'] failed with exit code 1:
  Date: Tue Mar 21 11:39:57 2017
  HibernationDevice: RESUME=UUID=a7f50198-2eb8-48c6-8051-06bce803d426
  InstallationDate: Installed on 2017-02-15 (33 days ago)
  InstallationMedia: Ubuntu-Server 16.04.1 LTS "Xenial Xerus" - Release amd64 
(20160719)
  IwConfig: Error: [Errno 2] No such file or directory: 'iwconfig'
  Lsusb:
   Bus 002 Device 001: ID 1d6b:0003 Linux Foundation 3.0 root hub
   Bus 001 Device 003: ID 0624:0249 Avocent Corp. Virtual Keyboard/Mouse
   Bus 001 Device 002: ID 413c:a001 Dell Computer Corp. Hub
   Bus 001 Device 001: ID 1d6b:0002 Linux Foundation 2.0 root hub
  MachineType: Dell Inc. PowerEdge R230
  PciMultimedia:
   
  ProcFB: 0 VESA VGA
  ProcKernelCmdLine: BOOT_IMAGE=/boot/vmlinuz-4.4.0-66-generic 
root=UUID=a86fd17c-b858-4b47-8e9f-6059eda9c38c ro
  RelatedPackageVersions:
   linux-restricted-modules-4.4.0-66-generic N/A
   linux-backports-modules-4.4.0-66-generic  N/A
   linux-firmware                            1.157.8
  RfKill: Error: [Errno 2] No such file or directory: 'rfkill'
  SourcePackage: linux
  UpgradeStatus: No upgrade log present (probably fresh install)
  dmi.bios.date: 03/28/2016
  dmi.bios.vendor: Dell Inc.
  dmi.bios.version: 1.3.2
  dmi.board.name: 0MFXTY
  dmi.board.vendor: Dell Inc.
  dmi.board.version: A01
  dmi.chassis.type: 23
  dmi.chassis.vendor: Dell Inc.
  dmi.modalias: 
dmi:bvnDellInc.:bvr1.3.2:bd03/28/2016:svnDellInc.:pnPowerEdgeR230:pvr:rvnDellInc.:rn0MFXTY:rvrA01:cvnDellInc.:ct23:cvr:
  dmi.product.name: PowerEdge R230
  dmi.sys.vendor: Dell Inc.

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