I'm seeing a similar issue with trying to install the latest 16.04.1
i386 edition
(http://releases.ubuntu.com/16.04/ubuntu-16.04.1-server-i386.iso) under
libvirt/virt-manager, on an amd64 VM running 16.04.1 (4.4.0-31-generic
#50-Ubuntu SMP Wed Jul 13 00:07:12 UTC 2016 x86_64 x86_64 x86_64
GNU/Linux).

qemu-kvm hangs, have to virsh destroy/kill the KVM process.

cat /etc/modprobe.d/qemu-system-x86.conf:

options kvm_intel nested=1

... and kvm-ok says acceleration is enabled.

Should I open a new bug report on this ?

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https://bugs.launchpad.net/bugs/1448269

Title:
  qemu guest hangs on nested kvm startup with host kernel oops

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