Fixed upstream by:
commit 67f2b72723c242969c5282fcb9acf00cc01f2a54
Author:     Cole Robinson <crobinso>
CommitDate: 2016-04-26 11:43:33 -0400

    conf: Drop restrictions on rng backend path
    
    Currently we only allow /dev/random and /dev/hwrng as host input
    for <rng><backend model='random'/> device. This was added after
    various upstream discussions in commit 4932ef45
    
    However this restriction has generated quite a few complaints over
    the years, so a new discussion was initiated:
    
    http://www.redhat.com/archives/libvir-list/2016-April/msg00987.html
    
    Several people suggested removing the restriction, and nobody really
    spoke up to defend it. So this patch drops the path restriction
    entirely
    
    https://bugzilla.redhat.com/show_bug.cgi?id=1074464

git describe: v1.3.4-rc1 contains: v1.3.4-rc1^0

Reproduce this bug with libvirt-1.2.17-13.el7_2.5.x86_64
Steps to reproduce:

1.Add this to <devices> in domain XML:
    <rng model='virtio'>
    <backend model='random'>/dev/urandom</backend>
    </rng>

2. # virsh start $domain
error: XML document failed to validate against schema: Unable to validate doc against /usr/share/libvirt/schemas/domain.rng
Extra element devices in interleave
Element domain failed to validate content

Failed. Try again? [y,n,i,f,?]: 

3. Define domain from an XML file with the rng device above:
   # virsh define testvm_bak.xml
    error: Failed to define domain from testvm_bak.xml
    error: XML error: file '/dev/urandom' is not a supported random source

Verify this bug with libvirt-2.0.0-4.el7.x86_64
Steps to verify:

1. Add this to <devices> in domain XML:
<rng model='virtio'>
<backend model='random'>/dev/urandom</backend>
</rng>

2. # virsh start $domain
Domain started successfully.

3.Check the domain xml file

   # virsh dumpxml testvm|grep -A3 rng
    <rng model='virtio'>
    <backend model='random'>/dev/urandom</backend>
    <alias name='rng0'/>
    <address type='pci' domain='0x0000' bus='0x00' slot='0x09' function='0x0'/>
    </rng>
    </devices>

4.login guest to check virtio-rng working status

   # lsmod |grep rng
    virtio_rng 13019 0
    virtio_ring 21524 6 virtio_blk,virtio_net,virtio_pci,virtio_rng,virtio_balloon,virtio_console
    virtio 15008 6 virtio_blk,virtio_net,virtio_pci,virtio_rng,virtio_balloon,virtio_console

   # dd if=/dev/hwrng of=/tmp/random
^C4699+1 records in
4699+0 records out
2405888 bytes (2.4 MB) copied, 3.88595 s, 619 kB/s

Since the result is as expected, mark this bug as verified.

Since the problem described in this bug report should be
resolved in a recent advisory, it has been closed with a
resolution of ERRATA.

For information on the advisory, and where to find the updated
files, follow the link below.

If the solution does not work for you, open a new bug report.

https://rhn.redhat.com/errata/RHSA-2016-2577.html