Looks like Serge's fix has been included here:
http://git.qemu.org/?p=qemu.git;a=commitdiff;h=efc8243d00ab4cf4fa05a9b
... so let's close this bug now.
** Changed in: qemu
Status: New => Fix Released
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https://bugs.launchpad.net/bugs/814222
Title:
kvm cannot use vhd files over 127GB
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