Description of problem:
Due to a missing libvirt API for retrieving the write watermark for all volumes in an image's backing chain, vdsm will not currently extend the volume that is being written to during a live merge operation. Until fixed, this will result in failed live merges for sparse block-based disks. Once the API is defined in libvirt, add support to vdsm to start merging internal volumes.
Related gerrit patch http://gerrit.ovirt.org/#/c/28620/ uses a qemu monitor command to provide the required information but it is not mergeable due to the unsupportability of custom monitor commands.
Implementation in progress.
oVirt 3.5 has been released and should include the fix for this issue.