> The physical hardware of the system is in perfect working order, with no
> problems handling the I/O load. Is it possible this use case (large amounts 
> of very
> small files) is not handled correctly by the virtualization storage layer? At 
> this
> time I'm using the 'RAW' file format, presented as an IDE disk to the VM.

Unlikely. What kernel do you use inside the VM?

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