Upgrading a Jaunty vm to Karmic works for me, but a new Karmic install
fails with the same error.

At some point I manage to update fstab after a mkswap && swapon and it
worked on reboot. But after a reboot of the host the problem was back.

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KVM machines became corrupted after reboot
https://bugs.launchpad.net/bugs/469419
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