Exactly the same problems, adding a new line to the DomU configuration file: 
extra='xencons=tty' 
fixed it. Problem is not related to hwclock, this may be another issue. However 
I see lockups apparently in the loopback driver, "dd" segfaulted durcing setup, 
etc... had to hard reset the server several times today

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xen guest hangs after mounting filesystem
https://bugs.launchpad.net/bugs/144631
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