I received a similar error trying to start a VM with kernel
acceleration.  After a bit of investigation I discovered that it was
because /dev/kvm has root.kvm ownership and my user (neil) wasn't in the
kvm group.  'sudo adduser neil kvm' and log out/in fixed the problem for
me.  Not sure if this is the same problem but it sounds pretty similar
:)

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Cannot create virtualized x64 vm with virtual machine manager + 
https://bugs.launchpad.net/bugs/195487
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