Upstream improves the error message with commits:

commit 59e21e973fdbfc9065ff5aa421ae36dbd1c4073a
Author: Peter Krempa <pkrempa>
Date:   Mon Sep 30 11:47:47 2013 +0200

    qemu: process: Silence coverity warning when rewinding log file
    
    The change in ef29de14c37d14abc546e90555a0093797facfdd that introduced
    better error logging from qemu introduced a warning from coverity about
    unused return value from lseek. Silence this warning and fix typo in the
    corresponding error message.
    
    Reported by: John Ferlan

commit ef29de14c37d14abc546e90555a0093797facfdd
Author: Peter Krempa <pkrempa>
Date:   Wed Sep 18 16:23:14 2013 +0200

    qemu: Wire up better early error reporting
    
    The previous patches added infrastructure to report better errors from
    monitor in some cases. This patch finalizes this "feature" by enabling
    this enhanced error reporting on early phases of VM startup. In these
    phases the possibility of qemu producing a useful error message is
    really high compared to running it during the whole life cycle. After
    the start up is complete, the feature is disabled to provide the usual
    error messages so that users are not confused by possibly irrelevant
    messages that may be in the domain log.
    
    The original motivation to do this enhancement is to capture errors when
    using VFIO device passthrough, where qemu reports errors after the
    monitor is initialized and the existing error catching code couldn't
    catch this producing a unhelpful message:
    
     # virsh start test
     error: Failed to start domain test
     error: Unable to read from monitor: Connection reset by peer
    
    With this change, the message is changed to:
    
     # virsh start test
     error: Failed to start domain test
     error: internal error: early end of file from monitor: possible problem:
     qemu-system-x86_64: -device vfio-pci,host=00:1a.0,id=hostdev0,bus=pci.0,addr=0x5: vfio: error, group 8 is not viable, please ensure all devices within the iommu_group are bound to their vfio bus driver.
     qemu-system-x86_64: -device vfio-pci,host=00:1a.0,id=hostdev0,bus=pci.0,addr=0x5: vfio: failed to get group 8
     qemu-system-x86_64: -device vfio-pci,host=00:1a.0,id=hostdev0,bus=pci.0,addr=0x5: Device 'vfio-pci' could not be initialized

commit 90139a6236eb20a5cd2595af39ea11adae7d54de
Author: Peter Krempa <pkrempa>
Date:   Wed Sep 18 16:17:39 2013 +0200

    qemu: monitor: Produce better errors on monitor hangup
    
    Change the monitor error code to add the ability to access the qemu log
    file using a file descriptor so that we can dig in it for a more useful
    error message. The error is now logged on monitor hangups and overwrites
    a possible lesser error. A hangup on the monitor usualy means that qemu
    has crashed and there's a significant chance it produced a useful error
    message.
    
    The functionality will be latent until the next patch.

commit 8519e9ecdcc26f9753dbd85e897daabbaa82dee8
Author: Peter Krempa <pkrempa>
Date:   Wed Sep 18 16:12:17 2013 +0200

    qemu: monitor: Add infrastructure to access VM logs for better err msgs
    
    Early VM startup errors usually produce a better error message in the
    machine log file. Currently we were accessing it only when the process
    exited during certain phases of startup. This will help adding a more
    comprehensive error extraction for early qemu startup phases.
    
    This patch adds infrastructure to keep a file descriptor for the machine
    log file that will be used in case an error happens.

commit 310651a5e346b23db9015061452b1887335aed67
Author: Peter Krempa <pkrempa>
Date:   Wed Sep 18 14:43:52 2013 +0200

    qemu_process: Make qemuProcessReadLog() more versatile and reusable
    
    Teach the function to skip character device definitions printed by qemu
    at startup in addition to libvirt log messages and make it usable from
    outside of qemu_process.c. Also add documentation about the func.

I cannot reproduce this with:
# rpm -qa | egrep '(libvirt|vdsm|kvm)'
vdsm-4.10.2-27.0.el6ev.x86_64
vdsm-cli-4.10.2-27.0.el6ev.noarch
vdsm-bootstrap-4.10.2-27.0.el6ev.noarch
libvirt-java-0.4.9-1.el6.noarch
vdsm-hook-faqemu-4.10.2-27.0.el6ev.noarch
vdsm-tests-4.10.2-27.0.el6ev.noarch
qemu-kvm-rhev-debuginfo-0.12.1.2-2.355.el6_4.7.x86_64
libvirt-snmp-0.0.2-3.el6.x86_64
vdsm-xmlrpc-4.10.2-27.0.el6ev.noarch
qemu-kvm-rhev-0.12.1.2-2.355.el6_4.7.x86_64
vdsm-hook-vhostmd-4.10.2-27.0.el6ev.noarch
vdsm-debuginfo-4.10.2-27.0.el6ev.x86_64
vdsm-reg-4.10.2-27.0.el6ev.noarch
vdsm-python-4.10.2-27.0.el6ev.x86_64
libvirt-0.10.2-18.el6_4.9.x86_64
libvirt-lock-sanlock-0.10.2-18.el6_4.9.x86_64
libvirt-python-0.10.2-18.el6_4.9.x86_64
libvirt-debuginfo-0.10.2-18.el6_4.9.x86_64
vdsm-debug-plugin-4.10.2-27.0.el6ev.noarch
libvirt-client-0.10.2-18.el6_4.9.x86_64
qemu-kvm-tools-0.12.1.2-2.355.el6.x86_64
vdsm-hook-qemucmdline-4.10.2-27.0.el6ev.noarch
libvirt-devel-0.10.2-18.el6_4.9.x86_64

Steps:
1. Install a rhel guest 
2. Shutdown the guest and configure the memery to 820000MB
3. Try to start the guest

Result:
Cannot start the guest and got error message:
error: Failed to start domain rhel6u4
error: internal error Process exited while reading console log output: char device redirected to /dev/pts/6
Failed to allocate 859832320000 B: Cannot allocate memory


# cat /var/log/libvirt/qemu/rhel6u4.log
LC_ALL=C PATH=/sbin:/usr/sbin:/bin:/usr/bin QEMU_AUDIO_DRV=spice /usr/libexec/qemu-kvm -name rhel6u4 -S -M rhel6.4.0 -enable-kvm -m 820000 -smp 1,sockets=1,cores=1,threads=1 -uuid 8e05273c-2adc-d344-0390-f8ffb01aaff9 -nodefconfig -nodefaults -chardev socket,id=charmonitor,path=/var/lib/libvirt/qemu/rhel6u4.monitor,server,nowait -mon chardev=charmonitor,id=monitor,mode=control -rtc base=utc -no-shutdown -device piix3-usb-uhci,id=usb,bus=pci.0,addr=0x1.0x2 -device virtio-serial-pci,id=virtio-serial0,bus=pci.0,addr=0x7 -drive file=/var/lib/libvirt/images/rhel6u4.img,if=none,id=drive-virtio-disk0,format=raw,cache=none -device virtio-blk-pci,scsi=off,bus=pci.0,addr=0x5,drive=drive-virtio-disk0,id=virtio-disk0,bootindex=1 -netdev tap,fd=26,id=hostnet0,vhost=on,vhostfd=27 -device virtio-net-pci,netdev=hostnet0,id=net0,mac=52:54:00:44:a4:06,bus=pci.0,addr=0x3 -chardev pty,id=charserial0 -device isa-serial,chardev=charserial0,id=serial0 -chardev spicevmc,id=charchannel0,name=vdagent -device virtserialport,bus=virtio-serial0.0,nr=1,chardev=charchannel0,id=channel0,name=com.redhat.spice.0 -device usb-tablet,id=input0 -spice port=5900,addr=127.0.0.1,disable-ticketing,seamless-migration=on -vga qxl -global qxl-vga.ram_size=67108864 -global qxl-vga.vram_size=67108864 -device intel-hda,id=sound0,bus=pci.0,addr=0x4 -device hda-duplex,id=sound0-codec0,bus=sound0.0,cad=0 -device virtio-balloon-pci,id=balloon0,bus=pci.0,addr=0x6
char device redirected to /dev/pts/6
Failed to allocate 859832320000 B: Cannot allocate memory
2014-02-25 05:51:49.230+0000: shutting down

#cat /var/log/libvirt/libvirtd.log
2014-02-25 05:53:23.700+0000: 18383: error : qemuProcessReadLogOutput:1473 : internal error Process exited while reading console log output: char device redirected to /dev/pts/6
Failed to allocate 859832320000 B: Cannot allocate memory


As the result, libvirt catch and report the error as qemu successfully.
You still can reproduce the problem now?

(In reply to CongDong from comment #4)
> As the result, libvirt catch and report the error as qemu successfully.
> You still can reproduce the problem now?

I believe I had the same error logged in libvirtd.log, the issue was that vdsm.log only contained a qemu monitor connection error. The env in question has been upgraded now so I can't easily reproduce this.

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