I had my RHEL 5 guest hang on boot before nash. Attempting to reinstall also hung after LILO on a black screen with a blinking cursor. Re-inserting kvm_intel with emulate_invalid_guest_state fixed this.
There's a kernel (kvm) bug tracking similar issues, which claims that 3.13 should be all fixed here (which is in rawhide). Duping to that
*** This bug has been marked as a duplicate of bug 967652 ***