I've been able to circumvent this bug with 'cirrus.modeset=0' in kernel boot 
options.
PS: My setup is a bit strange (Quantal with custom Trusty kernel rebased to 
3.12.6; both KVM host and guest)

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https://bugs.launchpad.net/bugs/1177772

Title:
  graphics fail to initialise correctly, in kvm with cirrus graphics

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