might be related? https://bugzilla.redhat.com/show_bug.cgi?id=798660

Here is an example of how to use the workaround and install a guest using
virt-manager substitute the appropriate $distro

- Installing with RHEL-6 virt-manager

  - click the 'Create a new virtual machine' button
   - choose a name for your VM, select Network Install click the 'Forward' button
   - set installation URL '$distro', URL Options: kernel parameters to 'root=live:$distro/LiveOS/squashfs.img ip=dhcp'  OS_TYPE 'Linux', OS Variant 'Red Hat Enterprise Linux 6' click the 'Forward' button
   - select Memory and CPUs click the 'Forward' button
   - select disk type if file I suggest a size of 8GB click the 'Forward' button
   - review and click 'Finish'
   - now install using anaconda as normal


- Installing with an older RHEL-5 virt-manager

  - highlight the hypervisor line then click the 'New' button
   - choose a name for your VM click the 'Forward' button
   - select Fully Virtualized click the 'Forward' button
   - select 'network install', OS_TYPE 'Linux', OS Variant 'Generic 2.6.x kernel' click the 'Forward' button
   - set installation media to '$distro', kernel parameters to 'root=live:$distro/LiveOS/squashfs.img ip=dhcp' click the 'Forward' button
   - select disk type, if file I suggest a size of 8GB click the 'Forward' button
   - select network (for now I have only tested 'Default') click the 'Forward' button
   - select vcpus and memory click the 'Forward' button
   - review and click 'Finish'
   - now install using anaconda as normal

quoting
https://bugzilla.redhat.com/show_bug.cgi?id=811851#c17

With F17 Beta / RHEL7 Alpha 2, the "root=live:XXX" workaround shouldn't be
necessary anymore. In fact, mixing root=live:[URL] and repo=[URL]/ks=[URL] is
likely to cause problems.

Are you using a RHEL7 Alpha 2 build? If so, could you please try with just
repo=[URL] ks=[URL] instead? (These arguments match what's in the existing docs
for anaconda.)

This request was resolved in Red Hat Enterprise Linux 7.0.

Contact your manager or support representative in case you have further questions about the request.