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0e1f616
(Get the code!)
I ran into this as well with an iSCSI mount point from a FreeNAS 8.3.1 on a CentOS 6.4 and Ubuntu 12.04.2 LTS client systems. If the raw or qcow2 files are created on an iSCSI volume they fail with cache=none being the default.
The error message from qemu-kvm kept mentioning a bad parameter. You have to replace the cache=none with the cache=passthrough and it just starts working.
RAW files fail late when they are most of the way through the install of the OS.
QCOW2 files fail immediate when the file is created by qemu-kvm.
This was hugely frustrating since if the files were created before the volume was converted to an iSCSI mountpoint, they appeared to work fine. It was when I tried to create my next image that it failed.
Hope this helps someone else.