Glad to hear that a fix is in the pipeline.

I don't know anything about KVM, but I saw this the other day:

http://lkml.iu.edu/hypermail/linux/kernel/1408.0/00981.html

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https://bugs.launchpad.net/bugs/1329434

Title:
  nested KVM fails on intel hardware - KVM: entry failed, hardware error
  0x0

Status in “linux” package in Ubuntu:
  Fix Released
Status in “linux” source package in Trusty:
  In Progress

Bug description:
  [Impact]
  Using nested KVM on some hypervisors doesn't work.

  [Test Case]
  1) enable nested KVM:
  sudo modprobe -r kvm_intel
  sudo modprobe kvm_intel nested=1
  cat /sys/module/kvm_intel/parameters/nested
  # should say Y

  2) generate an L1 guest and then generate an L2 guest inside the L1 guest
  - ensure L1 has enough memory to boot L2
  - if using libvirt you may need to edit the default bridge to use a different 
subnet than the L1 guest

  3) boot the L2 guest
  4) L2 guest should boot

  If not you can see the log:
  sudo cat /var/log/libvirt/qemu/nested-L2.log
  <snip>
  KVM: entry failed, hardware error 0x0
  EAX=00000000 EBX=00000000 ECX=00000000 EDX=00000663
  ESI=00000000 EDI=00000000 EBP=00000000 ESP=00000000
  EIP=0000fff0 EFL=00000002 [-------] CPL=0 II=0 A20=1 SMM=0 HLT=0
  ES =0000 00000000 0000ffff 00009300
  CS =f000 ffff0000 0000ffff 00009b00
  SS =0000 00000000 0000ffff 00009300
  DS =0000 00000000 0000ffff 00009300
  FS =0000 00000000 0000ffff 00009300
  GS =0000 00000000 0000ffff 00009300
  LDT=0000 00000000 0000ffff 00008200
  TR =0000 00000000 0000ffff 00008b00
  GDT=     00000000 0000ffff
  IDT=     00000000 0000ffff
  CR0=60000010 CR2=00000000 CR3=00000000 CR4=00000000
  DR0=0000000000000000 DR1=0000000000000000 DR2=0000000000000000 
DR3=0000000000000000 
  DR6=00000000ffff0ff0 DR7=0000000000000400
  EFER=0000000000000000
  Code=00 66 89 d8 66 e8 02 f7 ff ff 66 83 c4 0c 66 5b 66 5e 66 c3 <ea> 5b e0 
00 f0 30 36 2f 32 33 2f 39 39 00 fc 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00
  --- 
  AlsaDevices:
   total 0
   crw-rw---- 1 root audio 116,  1 Jun 13 18:26 seq
   crw-rw---- 1 root audio 116, 33 Jun 13 18:26 timer
  AplayDevices: Error: [Errno 2] No such file or directory
  ApportVersion: 2.14.1-0ubuntu3.2
  Architecture: amd64
  ArecordDevices: Error: [Errno 2] No such file or directory
  AudioDevicesInUse: Error: command ['fuser', '-v', '/dev/snd/seq', 
'/dev/snd/timer'] failed with exit code 1:
  DistroRelease: Ubuntu 14.04
  IwConfig: Error: [Errno 2] No such file or directory
  MachineType: Intel Corporation S2600WTT
  Package: linux (not installed)
  PciMultimedia:
   
  ProcEnviron:
   TERM=xterm
   PATH=(custom, no user)
   XDG_RUNTIME_DIR=<set>
   LANG=en_US.UTF-8
   SHELL=/bin/bash
  ProcFB: 0 VESA VGA
  ProcKernelCmdLine: BOOT_IMAGE=/boot/vmlinuz-3.13.0-24-generic 
root=UUID=b5d11a1d-c48f-4abf-a622-d1efe52fe97c ro
  ProcVersionSignature: User Name 3.13.0-24.46-generic 3.13.9
  RelatedPackageVersions:
   linux-restricted-modules-3.13.0-24-generic N/A
   linux-backports-modules-3.13.0-24-generic  N/A
   linux-firmware                             1.127.2
  RfKill: Error: [Errno 2] No such file or directory
  Tags:  trusty uec-images
  Uname: Linux 3.13.0-24-generic x86_64
  UpgradeStatus: No upgrade log present (probably fresh install)
  UserGroups: adm audio cdrom dialout dip floppy libvirtd netdev plugdev sudo 
video
  _MarkForUpload: True
  dmi.bios.date: 05/06/2014
  dmi.bios.vendor: Intel Corporation
  dmi.bios.version: GRNDSDP1.86B.0030.R03.1405061547
  dmi.board.asset.tag: Base Board Asset Tag
  dmi.board.name: S2600WTT
  dmi.board.vendor: Intel Corporation
  dmi.board.version: H30334-201
  dmi.chassis.asset.tag: ....................
  dmi.chassis.type: 23
  dmi.chassis.vendor: ...............................
  dmi.chassis.version: ..................
  dmi.modalias: 
dmi:bvnIntelCorporation:bvrGRNDSDP1.86B.0030.R03.1405061547:bd05/06/2014:svnIntelCorporation:pnS2600WTT:pvr....................:rvnIntelCorporation:rnS2600WTT:rvrH30334-201:cvn...............................:ct23:cvr..................:
  dmi.product.name: S2600WTT
  dmi.product.version: ....................
  dmi.sys.vendor: Intel Corporation

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