Before the luupgrade command, you should run the liveupgrade20, see below:
#!/bin/sh -x
IMAGES=/zfs1/images
INSTALL=/zfs1/install
MEDIA=${INSTALL}/dvd
OS=11
BE=snv_b101
AF=snv_b103
export IMAGES INSTALL MEDIA OS BE AF
luactivate ${BE}
mount -F hsfs -o ro `lofiadm -a ${IMAGES}/sol-nv-b116-x86-dvd.iso` ${MEDIA}
lucreate -p rpool -n ${AF}
${MEDIA}/Solaris_${OS}/Tools/Installers/liveupgrade20 -noconsole -nodisplay
/usr/lib/lu/lux86menu_propagate ${MEDIA}
luupgrade -u -n ${AF} -s ${MEDIA}
luactivate ${AF}
umount ${MEDIA}
lofiadm -d /dev/lofi/1
Check the /var/sadm/install/Live_Upgrade_install.B06280xxx log for any errors.
if you see any submit a bug report at http://www.opensolaris.org/bug/report.jspa
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