Could reproduce this bug on the following components of rh5.6:
libvirt-0.8.2-15.el5
virt-manager-0.6.1-13.el5
kernel-2.6.18-238.el5

Steps:
open two terminal at the same time:
on one terminal:
# virsh vol-create-as default vol-test2.raw 4194304000 --allocation 3024347136
--format raw
(running)

on the other terminal:
#virsh vol-delete --pool default vol-test2.raw
error: Failed to delete vol vol-test2.raw
error: internal error volume 'vol-test2.raw' is still being allocated.

The error message is from the src/storage/storage_driver.c, in the package "libvirt-0.8.2-15.el5.src.rpm"
... 
   if (vol->building) {
        virStorageReportError(VIR_ERR_INTERNAL_ERROR,
                              _("volume '%s' is still being allocated."),
                              vol->name);
        goto cleanup;
    }
...

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