Thanks for reporting this bug.

Can you say specifically, step by step, how you created the VMs?

Can you still create new machines (which presumably disappear) or does
virt-manager now completely refuse to connect to the local libvirtd?

Are libvirt and virt-manager on the same machine?

** Package changed: libvirt (Ubuntu) => virt-manager (Ubuntu)

** Changed in: virt-manager (Ubuntu)
       Status: New => Incomplete

** Changed in: virt-manager (Ubuntu)
   Importance: Undecided => Medium

** Also affects: libvirt (Ubuntu)
   Importance: Undecided
       Status: New

** Changed in: libvirt (Ubuntu)
       Status: New => Incomplete

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https://bugs.launchpad.net/bugs/999681

Title:
  Afer upgrading "libvirt-bin" to  0.9.8-2ubuntu17.1 to virsh cannot
  identify  machine after reboot

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