Hi, The problem seems to be caused by the new multi-queue xen blk driver and I was advised by the Xen devs to increase the gnttab_max_frames=256 parameter for the hypervisor. This has solved the blocking issue for me and it has been running without problems for a few months now.
I/O to LUNs hang / stall under high load when using xen-blkfront https://www.novell.com/support/kb/doc.php?id=7018590 -- Valentin