> I immediately reproduced the problem locally.  It turns out that
> kvm reflects packets coming from one guest NIC on another guest
> NIC, and since both are connected to the same bridge we're getting
> endless packet storm.  To a level when kvm process becomes 100%
> busy and does not respond to anything but `kill -9'.

You created a network loop. It is working exactly as expected.
Create the same topology with a physical network hub and a pair of NICs and 
you'll get the same end result.

Paul


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