Thank you for taking the time to report this bug and helping to make
Ubuntu better.

I think that the issue may be that virt-install is specifying the disk
format incorrectly.

Assuming that you are using qcow2 format, virt-install is incorrectly
specifying the overlay file as 'raw':

   file=/VMs/Windows7DomainTest.ovl,if=none,id=drive-
ide0-0-0,boot=on,format=raw

This would stop the detection of the base disk image supporting the
overlay which would make it look like the disk is not there.

Please could you try using the --disk option instead of -f to specify
the file to support the VM:

  --disk path=/VMs/Domainator.ovl,format=qcow2

Please could you also check which version of virtinst you are using - a
specific change was made under bug 655392 to help resolve this issue.



** Changed in: libvirt (Ubuntu)
       Status: New => Incomplete

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https://bugs.launchpad.net/bugs/695697

Title:
  libvirt not working properly with overlays

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