Solved for me - my problem was that I did not reboot the physical
machine after installing kvm+libvirt packages and thus the virtual
machine was running QEMU software virtualization and not HW-based KVM
one.

Apparently QEMU has some issues with the SeaBIOS, which prevents int13
to operate properly.

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Unable to start ubuntu hardy server guest os with kvm
https://bugs.launchpad.net/bugs/622077
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