Well, I tried again and the upgrade worked. I don't get it. I changed the size of the template yesterday, and it didn't work. Today, I didn't change anything, and it did. The only thing that changed this time was that I hard-power-cycled the machine, where before I had merely shut down the vms, and then brought them up again. So, I think you are right -- after changing the size of the template vm, I had to "really" power cycle everything instead of just shutting it down using the qubes manager. Go figure.
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