Comment 11 for bug 1037675

I had exactly the same problem using custom kernel on Debian GNU/Linux / qemu-kvm 1.1.1 or 1.2.0.

CPU: Intel(R) Xeon(R) CPU E5-2667 0 @ 2.90GHz stepping 7 microcode 0x70b

I have two solutions: (VERY UGGLY) patch the kernel to remove intel perf events (hardware events):

--- ../linux-3.4.10-fai-server/arch/x86/kernel/cpu/perf_event.c 2012-08-27 00:02:10.000000000 +0200
+++ arch/x86/kernel/cpu/perf_event.c 2012-09-10 18:56:11.870774243 +0200
@@ -1324,7 +1328,8 @@
  struct event_constraint *c;
  int err;

- pr_info("Performance Events: ");
+ pr_info("Performance Events: (DISABLED BY UGGLY PATCH)");
+ return 0;

  switch (boot_cpu_data.x86_vendor) {
  case X86_VENDOR_INTEL:

*OR*

Add support for KVM Guest in the *GUEST* kernel config:

+CONFIG_KVM_CLOCK=y
+CONFIG_KVM_GUEST=y
+CONFIG_PARAVIRT=y
+# CONFIG_PARAVIRT_SPINLOCKS is not set
+CONFIG_PARAVIRT_CLOCK=y