I just had the same symptoms after upgrading Ubuntu 16.04 OpenStack
Mitaka cluster packages to latest. Some servers had no problems. Very
few had the "Failed to connect socket" error when you try to e.g. 'virsh
list --all'. Note that libvirtd itself did start, and had no apparent
errors. Package reinstall did not work, all suggestions above did not
work. I then tried manually running libvirt with

  libvirtd -l

It did start fine, and there was no error connecting to domain this
time. After that I stopped it and started the service usual way. No
error this time as well. Sorry for not providing more details for
package versions etc, putting it here as another possible workaround for
reference.

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https://bugs.launchpad.net/bugs/1583009

Title:
  Error starting domain since update

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