I can reproduce this using kvm from the command line, so libvirt appears
unrelated:

kvm -hda lucid.img -m 512M -smp 2 -vnc :1 -redir tcp:2222::22 -cdrom
lucid-server-amd64.iso

The simplest 'bzr branch grub grub-b' pins my cpu.

** Changed in: libvirt (Ubuntu)
       Status: New => Invalid

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

Title:
  kvm 100% when performing apparently IO operations

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