Thanks Andres,  the .xml looks fine, but the command spawned by libvirt
certainly does not.  In particular, the drive definition for natty.img
looks bogus, with its 'if=none'.

If you close virt-manager and start the vm with 'virsh start natty1', do
you get the same command?

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https://bugs.launchpad.net/bugs/716528

Title:
  kvm 100% when performing apparently IO operations

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