Description of problem: Probably best just to read Dan's description of the problem here: https://www.redhat.com/archives/libvir-list/2012-September/msg01546.html
# rpm -q selinux-policy
I'm using: selinux-policy-3.11.1-7.fc18.noarch However the question is whether upstream selinux-policy knows about .cache/libvirt and .config/libvirt. By the way, I've no idea how these should be labelled, just that changing the labels makes libvirt logging work (with Dan's patch).
matchpathcon /home/rjones/.cache/libvirt/qemu/log/guestfs-wd6efsxohmy5jd2s.log /home/rjones/.cache/libvirt/qemu/log/guestfs-wd6efsxohmy5jd2s.log unconfined_u:object_r:svirt_home_t:s0 On my F18 box. So the proper labels are in place. The problem is Rawhide not getting the latest policy from F18.
I found that restorecon -F -R -v ~/.cache fixed this problem (once I'd manually downloaded and installed the latest selinux-policy). Note I had to use the '-F' option. That wasn't completely obvious, but it turned out to have something to do with svirt_home_t being a "customizable type".