Serge -
Ill jump to the point and tell you that Ive tried without virtio as well, and 
the problem remains that same. Thanks for your continued help on this issue. Im 
blocked on migrating any windows hosts for now.  The only other time ive seen 
something like this was when my server has Cpu frequency scaling turned on 
before..its would cause live hosts to lock and go to 99% cpu usage. But ive 
already made sure cpu frequency scaling is off.

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win2k3 guest has blank screen and high cpu on first boot
https://bugs.launchpad.net/bugs/671163
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