Comment 4 for bug 922486

So the problem happens to be that when libvirtd is started, it does a first init for the xen hypervisor driver. At that point in time we do not have run the xend start script which in turn loads xenfs and that creates /proc/xen/privcmd. Now, this is exactly what the init function for the hypervisor driver checks first and then decides that there is no hypervisor.
What is a bit odd is that there is no real error in the libvirtd log. Whenever the attempts to list domains are made later on, all the xen drivers appear to be loading successful.