This is dirty but at the same time we could be quite sure this does work
as it is clearly the startup going wrong. :)

Maybe I can go the other way round and downgrade my libvirt version to
the ubuntu1.1 level to see whether things fail then. Some of the CVE
fixes just read to me as fix leaking hypervisor capabilities into guests
which would be matching what we see. That for some reason the libxl
driver thinks it is running inside a dom0.

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https://bugs.launchpad.net/bugs/1248025

Title:
  libvirt-bin fails to start inside Xen

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