Yes, in my case both host and guest are 32-bit. PAE is enabled by
default in stock 32-bit server Lucid kernel.

All my computers are running in 32-bit mode and, unfortunately, I can't
easily reinstall OS on them.

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https://bugs.launchpad.net/bugs/1047531

Title:
  Ubuntu 12.04 (Precise) guests can't boot on Ubuntu 10.04 (Lucid) QEMU-
  KVM host

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