By the way, if I do the opposite: On an new Ubuntu 14.04 server installation with a newly installed guest Ubuntu dekstop; Use virsh edit and change the machine type to pc-1.0, then the quest VM has the same issues upon login.
 
The information requested above:

doug@s15:~$ dpkg -l | egrep 'qemu|kvm|libvirt'
ii  ipxe-qemu                            1.0.0+git-20131111.c3d1e78-2ubuntu1  all          PXE boot firmware - ROM images for qemu
ii  kvm-ipxe                             1.0.0+git-20131111.c3d1e78-2ubuntu1  all          transitional dummy package
ii  libsys-virt-perl                     1.2.1-1                              amd64        Perl module providing an extension for the libvirt library
ii  libvirt-bin                          1.2.2-0ubuntu13                      amd64        programs for the libvirt library
ii  libvirt0                             1.2.2-0ubuntu13                      amd64        library for interfacing with different virtualization systems
ii  python-libvirt                       1.2.2-0ubuntu1                       amd64        libvirt Python bindings
ii  qemu-common                          2.0.0~rc1+dfsg-0ubuntu3              all          dummy transitional package from qemu-common to qemu-keymaps
ii  qemu-keymaps                         2.0.0~rc1+dfsg-0ubuntu3              all          QEMU keyboard maps
ii  qemu-kvm                             2.0.0~rc1+dfsg-0ubuntu3              amd64        QEMU Full virtualization on x86 hardware (transitional package)
ii  qemu-system-common                   2.0.0~rc1+dfsg-0ubuntu3              amd64        QEMU full system emulation binaries (common files)
ii  qemu-system-x86                      2.0.0~rc1+dfsg-0ubuntu3              amd64        QEMU full system emulation binaries (x86)
ii  qemu-utils                           2.0.0~rc1+dfsg-0ubuntu3              amd64        QEMU utilities

doug@s15:~$ lsb_release -a
No LSB modules are available.
Distributor ID: Ubuntu
Description:    Ubuntu 14.04 LTS
Release:        14.04
Codename:       trusty

doug@s15:~$ virsh capabilities
<capabilities>

  <host>
    <uuid>c09f3a27-cb5b-d911-9bbf-f46d04652d8e</uuid>
    <cpu>
      <arch>x86_64</arch>
      <model>Westmere</model>
      <vendor>Intel</vendor>
      <topology sockets='1' cores='4' threads='2'/>
      <feature name='rdtscp'/>
      <feature name='avx'/>
      <feature name='osxsave'/>
      <feature name='xsave'/>
      <feature name='tsc-deadline'/>
      <feature name='pcid'/>
      <feature name='pdcm'/>
      <feature name='xtpr'/>
      <feature name='tm2'/>
      <feature name='est'/>
      <feature name='vmx'/>
      <feature name='ds_cpl'/>
      <feature name='monitor'/>
      <feature name='dtes64'/>
      <feature name='pclmuldq'/>
      <feature name='pbe'/>
      <feature name='tm'/>
      <feature name='ht'/>
      <feature name='ss'/>
      <feature name='acpi'/>
      <feature name='ds'/>
      <feature name='vme'/>
    </cpu>
    <power_management>
      <suspend_mem/>
      <suspend_disk/>
      <suspend_hybrid/>
    </power_management>
    <migration_features>
      <live/>
      <uri_transports>
        <uri_transport>tcp</uri_transport>
      </uri_transports>
    </migration_features>
    <topology>
      <cells num='1'>
        <cell id='0'>
          <memory unit='KiB'>16002556</memory>
          <cpus num='8'>
            <cpu id='0' socket_id='0' core_id='0' siblings='0,4'/>
            <cpu id='1' socket_id='0' core_id='1' siblings='1,5'/>
            <cpu id='2' socket_id='0' core_id='2' siblings='2,6'/>
            <cpu id='3' socket_id='0' core_id='3' siblings='3,7'/>
            <cpu id='4' socket_id='0' core_id='0' siblings='0,4'/>
            <cpu id='5' socket_id='0' core_id='1' siblings='1,5'/>
            <cpu id='6' socket_id='0' core_id='2' siblings='2,6'/>
            <cpu id='7' socket_id='0' core_id='3' siblings='3,7'/>
          </cpus>
        </cell>
      </cells>
    </topology>
    <secmodel>
      <model>apparmor</model>
      <doi>0</doi>
    </secmodel>
    <secmodel>
      <model>dac</model>
      <doi>0</doi>
      <baselabel type='kvm'>+109:+106</baselabel>
      <baselabel type='qemu'>+109:+106</baselabel>
    </secmodel>
  </host>

  <guest>
    <os_type>hvm</os_type>
    <arch name='i686'>
      <wordsize>32</wordsize>
      <emulator>/usr/bin/qemu-system-i386</emulator>
      <machine canonical='pc-i440fx-trusty' maxCpus='255'>pc</machine>
      <machine maxCpus='255'>pc-0.12</machine>
      <machine maxCpus='255'>pc-1.3</machine>
      <machine maxCpus='255'>pc-q35-1.6</machine>
      <machine maxCpus='255'>pc-q35-1.5</machine>
      <machine maxCpus='1'>xenpv</machine>
      <machine maxCpus='255'>pc-i440fx-1.6</machine>
      <machine maxCpus='255'>pc-i440fx-1.7</machine>
      <machine maxCpus='255'>pc-0.11</machine>
      <machine maxCpus='255'>pc-0.10</machine>
      <machine maxCpus='255'>pc-1.2</machine>
      <machine maxCpus='1'>isapc</machine>
      <machine maxCpus='255'>pc-q35-1.4</machine>
      <machine maxCpus='128'>xenfv</machine>
      <machine maxCpus='255'>pc-0.15</machine>
      <machine maxCpus='255'>pc-0.14</machine>
      <machine maxCpus='255'>pc-i440fx-1.5</machine>
      <machine canonical='pc-q35-2.0' maxCpus='255'>q35</machine>
      <machine maxCpus='255'>pc-i440fx-1.4</machine>
      <machine maxCpus='255'>pc-1.1</machine>
      <machine maxCpus='255'>pc-q35-1.7</machine>
      <machine maxCpus='255'>pc-1.0</machine>
      <machine maxCpus='255'>pc-i440fx-2.0</machine>
      <machine maxCpus='255'>pc-0.13</machine>
      <domain type='qemu'>
      </domain>
      <domain type='kvm'>
        <emulator>/usr/bin/kvm-spice</emulator>
        <machine canonical='pc-i440fx-trusty' maxCpus='255'>pc</machine>
        <machine maxCpus='255'>pc-1.3</machine>
        <machine maxCpus='255'>pc-0.12</machine>
        <machine maxCpus='255'>pc-q35-1.6</machine>
        <machine maxCpus='255'>pc-q35-1.5</machine>
        <machine maxCpus='1'>xenpv</machine>
        <machine maxCpus='255'>pc-i440fx-1.6</machine>
        <machine maxCpus='255'>pc-i440fx-1.7</machine>
        <machine maxCpus='255'>pc-0.11</machine>
        <machine maxCpus='255'>pc-1.2</machine>
        <machine maxCpus='255'>pc-0.10</machine>
        <machine maxCpus='1'>isapc</machine>
        <machine maxCpus='255'>pc-q35-1.4</machine>
        <machine maxCpus='128'>xenfv</machine>
        <machine maxCpus='255'>pc-0.15</machine>
        <machine maxCpus='255'>pc-0.14</machine>
        <machine maxCpus='255'>pc-i440fx-1.5</machine>
        <machine maxCpus='255'>pc-i440fx-1.4</machine>
        <machine canonical='pc-q35-2.0' maxCpus='255'>q35</machine>
        <machine maxCpus='255'>pc-1.1</machine>
        <machine maxCpus='255'>pc-q35-1.7</machine>
        <machine maxCpus='255'>pc-1.0</machine>
        <machine maxCpus='255'>pc-i440fx-2.0</machine>
        <machine maxCpus='255'>pc-0.13</machine>
      </domain>
    </arch>
    <features>
      <cpuselection/>
      <deviceboot/>
      <acpi default='on' toggle='yes'/>
      <apic default='on' toggle='no'/>
      <pae/>
      <nonpae/>
    </features>
  </guest>

  <guest>
    <os_type>hvm</os_type>
    <arch name='x86_64'>
      <wordsize>64</wordsize>
      <emulator>/usr/bin/qemu-system-x86_64</emulator>
      <machine canonical='pc-i440fx-trusty' maxCpus='255'>pc</machine>
      <machine maxCpus='255'>pc-1.3</machine>
      <machine maxCpus='255'>pc-0.12</machine>
      <machine maxCpus='255'>pc-q35-1.6</machine>
      <machine maxCpus='255'>pc-q35-1.5</machine>
      <machine maxCpus='1'>xenpv</machine>
      <machine maxCpus='255'>pc-i440fx-1.6</machine>
      <machine maxCpus='255'>pc-i440fx-1.7</machine>
      <machine maxCpus='255'>pc-0.11</machine>
      <machine maxCpus='255'>pc-1.2</machine>
      <machine maxCpus='255'>pc-0.10</machine>
      <machine maxCpus='1'>isapc</machine>
      <machine maxCpus='255'>pc-q35-1.4</machine>
      <machine maxCpus='128'>xenfv</machine>
      <machine maxCpus='255'>pc-0.15</machine>
      <machine maxCpus='255'>pc-0.14</machine>
      <machine maxCpus='255'>pc-i440fx-1.5</machine>
      <machine maxCpus='255'>pc-i440fx-1.4</machine>
      <machine canonical='pc-q35-2.0' maxCpus='255'>q35</machine>
      <machine maxCpus='255'>pc-1.1</machine>
      <machine maxCpus='255'>pc-q35-1.7</machine>
      <machine maxCpus='255'>pc-1.0</machine>
      <machine maxCpus='255'>pc-i440fx-2.0</machine>
      <machine maxCpus='255'>pc-0.13</machine>
      <domain type='qemu'>
      </domain>
      <domain type='kvm'>
        <emulator>/usr/bin/kvm-spice</emulator>
        <machine canonical='pc-i440fx-trusty' maxCpus='255'>pc</machine>
        <machine maxCpus='255'>pc-1.3</machine>
        <machine maxCpus='255'>pc-0.12</machine>
        <machine maxCpus='255'>pc-q35-1.6</machine>
        <machine maxCpus='255'>pc-q35-1.5</machine>
        <machine maxCpus='1'>xenpv</machine>
        <machine maxCpus='255'>pc-i440fx-1.6</machine>
        <machine maxCpus='255'>pc-i440fx-1.7</machine>
        <machine maxCpus='255'>pc-0.11</machine>
        <machine maxCpus='255'>pc-1.2</machine>
        <machine maxCpus='255'>pc-0.10</machine>
        <machine maxCpus='1'>isapc</machine>
        <machine maxCpus='255'>pc-q35-1.4</machine>
        <machine maxCpus='128'>xenfv</machine>
        <machine maxCpus='255'>pc-0.15</machine>
        <machine maxCpus='255'>pc-0.14</machine>
        <machine maxCpus='255'>pc-i440fx-1.5</machine>
        <machine maxCpus='255'>pc-i440fx-1.4</machine>
        <machine canonical='pc-q35-2.0' maxCpus='255'>q35</machine>
        <machine maxCpus='255'>pc-1.1</machine>
        <machine maxCpus='255'>pc-q35-1.7</machine>
        <machine maxCpus='255'>pc-1.0</machine>
        <machine maxCpus='255'>pc-i440fx-2.0</machine>
        <machine maxCpus='255'>pc-0.13</machine>
      </domain>
    </arch>
    <features>
      <cpuselection/>
      <deviceboot/>
      <acpi default='on' toggle='yes'/>
      <apic default='on' toggle='no'/>
    </features>
  </guest>

</capabilities>


doug@s15:~$ qemu-system-x86_64 -machine help
Supported machines are:
pc-0.13              Standard PC (i440FX + PIIX, 1996)
pc-i440fx-2.0        Standard PC (i440FX + PIIX, 1996)
pc-1.0               Standard PC (i440FX + PIIX, 1996)
pc-q35-1.7           Standard PC (Q35 + ICH9, 2009)
pc-1.1               Standard PC (i440FX + PIIX, 1996)
q35                  Standard PC (Q35 + ICH9, 2009) (alias of pc-q35-2.0)
pc-q35-2.0           Standard PC (Q35 + ICH9, 2009)
pc-i440fx-1.4        Standard PC (i440FX + PIIX, 1996)
pc-i440fx-1.5        Standard PC (i440FX + PIIX, 1996)
pc-0.14              Standard PC (i440FX + PIIX, 1996)
pc-0.15              Standard PC (i440FX + PIIX, 1996)
xenfv                Xen Fully-virtualized PC
pc-q35-1.4           Standard PC (Q35 + ICH9, 2009)
isapc                ISA-only PC
pc-0.10              Standard PC (i440FX + PIIX, 1996)
pc                   Ubuntu 14.04 PC (i440FX + PIIX, 1996) (alias of pc-i440fx-trusty)
pc-i440fx-trusty     Ubuntu 14.04 PC (i440FX + PIIX, 1996) (default)
pc-1.2               Standard PC (i440FX + PIIX, 1996)
pc-0.11              Standard PC (i440FX + PIIX, 1996)
pc-i440fx-1.7        Standard PC (i440FX + PIIX, 1996)
pc-i440fx-1.6        Standard PC (i440FX + PIIX, 1996)
none                 empty machine
xenpv                Xen Para-virtualized PC
pc-q35-1.5           Standard PC (Q35 + ICH9, 2009)
pc-q35-1.6           Standard PC (Q35 + ICH9, 2009)
pc-0.12              Standard PC (i440FX + PIIX, 1996)
pc-1.3               Standard PC (i440FX + PIIX, 1996)
doug@s15:~$